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
Different than how you describe, at least in most cases. Usually, the grocery store actually already bought that bottle of coke at a reduced price, say $1.50. That $1.50 is already in Coke’s pocket. The store then sells it to you for $2, so they make back their money and then their profit. All the costs in the store come out of the store’s revenue of $0.50.
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