Say I buy a 2 dollar bottle of Coke from a grocery store. I go up to the cashier, I give them the money, they put it in the till, and I walk away. I have given money to the store, who presumably will then use that 2 dollars to fill out their employees paychecks, pay for things in the store like water, electricity, heating, janitorial staff for cleaning, etc, etc.
After all of that, how will Coke ever see my 2 dollars? It would seem to be that the money would have diluted beyond all recognition by that point.
In: Economics
You are looking at the chain of money backward. Coke mass produced the product at a cost of 50 cents a bottle. Then sold it to your grocery store for $1 a bottle. The grocery store sold it to you for $2. In all of the steps the difference between cost and sale is gross profit . Out of each step profit margin is where the cost of labor is paid. So net profit occurs in the difference. If coke makes a profit after labor and production. Of a dime. The grocery store sees roughly the same margin. These numbers are not exact but for example sake
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