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2 July, 01:52

A tire manufacturer produces 400 tires valued at $20 each. Three hundred tires are sold to a tire shop, which then sells them to households for $50 each. The remaining tires are unsold and are added to the tire manufacturer’s inventory. How much is added to GDP?

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  1. 2 July, 02:03
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    The amount added to the GDP is $17000.

    Explanation:

    The value added to the GDP = number of tires sold*selling price of 1 tire + number of tires unsold * cost price of 1 tire

    = 300 * $50 + 100*$20

    = $15000 + $2000

    = $17000

    Therefore, the amount added to the GDP is $17000.
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