Question

A dairy buys $50,000 worth of milk and spend $5,000 on cartons and utilities. It sells the cartons of milk to a grocery store for $60,000 that then sells all of the cartons to consumers for $65,000. How much do these actions add to GDP?
a. $55,000
b. $65,000
c. $120,000
d. None of the above

Answer 1

Answer:

The Correct Answer is b. $65,000.

Explanation:

Gross Domestic Products GDP is total monetary value of all finished goods and services. It refers to final price of Finished Goods.

When a dairy buys milk, this is not ready to be sold to consumer. It needs cartons and packaging material in which it will be stored and transported to the consumers. The total cost of bringing the raw milk to ready for use for the consumers will be the GDP addition. The total amount added to Gross Domestic Product GDP will be $65,000. This is the price at which cartons are sold to consumers .