A Good Goes Through Three Stages of Production

question 193

Multiple Choice

A good goes through three stages of production. The value added at stage 1 is $3; the value added at stage 2 is $5; the value added at stage 3 is $2. What is the retail price of the good?

• A) $2
• B) $10
• C) $20
• D) Cannot be determined based on the information given.

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Definitions:

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.

External Auditor

An independent party that reviews an organization's financial statements to ensure accuracy and compliance with accounting standards.

Net Income

The total earnings of a company after deducting all expenses, taxes, and losses from total revenue.

Balance Sheet

This details a business's financial condition by listing its assets, debts, and the equity of its shareholders on a specific date.