Question

A farmer grows wheat and sells it to a miller for $1; the miller turns the wheat into flour and sells it to a baker for $3; the baker uses the flour to make bread and sells the bread for $6. The value added by the miller is:

Answer 1

Given:

Farmer's price = $1

Miller's price = $3

Baker's price = $6

To find:

The value added by the miller

Solution:

From the given, we can interpret that after purchasing from the farmer, the miller turns the wheat into flour by grinding and he sells the wheat flour to the baker.

This means that the miller added the cost of grinding with the purchasing cost. We can calculate the cost added by miller by subtracting the farmer's price from the miller's price that is
`\$3-\$1=\$2`

Therefore, the value added by the miller is $2.