A farmer sells wheat to a bakery for R50 000. The bakery uses it to bake bread and sells the bread to households for R120 000. Using the production (value-added) approach, GDP increases by:

To calculate the increase in GDP using the production (value-added) approach, we sum the value added at each stage of production. Step 1: Calculate the value added by the farmer. The farmer sells wheat for R50 000. Since there are no intermediate goods mentioned for the farmer, this is the full value added. Value added by farmer = R50\,000 Step 2: Calculate the value added by the bakery. The bakery buys wheat for R50 000 and sells bread for R120 000. The value added by the bakery is the difference between its sales revenue and the cost of intermediate goods (wheat). Value added by bakery = Sales revenue - Cost of intermediate goods Value added by bakery = R120\,000 - R50\,000 = R70\,000 Step 3: Calculate the total increase in GDP. The total increase in GDP is the sum of the value added at each stage of production. Total GDP increase = Value added by farmer + Value added by bakery Total GDP increase = R50\,000 + R70\,000 = R120\,000 The correct option is C. The final answer is R120 000. Send me the next one 📸