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In Shoetown, a rancher takes $0 worth of inputs and produces animal skins, which he sells to the tanner for
$400. The tanner then sells leather to the shoemaker for $700, and the shoemaker then sells $1200
worth of shoes. The value added from these transactions is

A) $ 800. B) $1000. C) $1200. D) $2300. E) $2500.

Respuesta :

Answer:

The value added from these transactions is $1200,option C

Explanation:

Initially the rancher took $0 worth of input and produced animal skin of $400,at that stage $400 was the value added.

Thereafter,the tanner brought $400 input and made output of $700,hence $300 has been added.

Finally,the shoemaker bought input for $700 and turned out  shoes worth $1200,thereby adding $500.

From the foregoing,the total value added from the beginning to the end is $1200($400+$300+$500)

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