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Consider an economy with three companies – Cotton Inc, Yarnie Co, and Shirts & Pants Co. Cotton Inc processes raw cotton and sells all of its output to Yarnie Co for $1,000. Yarnie Co then turns cotton into thread, and sells all of their balls of thread to Shirts & Pants Co for $10 each. Shirts & Pants Co can use 1 ball of thread to make 1 shirt and that shirt can then be sold for $15, or they can use 2 balls of thread to make 1 pair of pants, and that pair of pants can then be sold for $30. Suppose that Shirts & Pants Co sells 200 pairs of pants and 200 shirts. Given this information and holding everything else constant, what is the value added by each firm?
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