Here is a simple example. The inhabitants of a small island begin exporting beautiful cloth made from a rare plant that grows only on their island. Seeing how popular the small quantity that they export has been, they steadily raise their prices. A clothing maker from New York, thinking that he can save money by "cutting out the middleman," decides to travel to the small island and buy the cloth himself. Ignorant of the local custom of offering strangers outrageous prices and then negotiating down, the clothing maker accepts (much to everyone's surpise) the initial price of 400 tepizes/m2. The price of this cloth in New York is 120 dollars/yard2.If the clothing maker bought 500 m2 of this fabric, how much money did he lose? Use 1tepiz=0.625dollar and 0.9144m=1yard.
6 answers
to two sig figs it would be
53000 or 5.3x10^4
He spent 125000 on the cloth, but he can only sell it for $52493 in New York. That leaves him at about a $73000 loss
1 answer