macro 2 q (1 Viewer)

[paper cup]

Hey, help on this q?
Ty

A jeweler leaves the prices of his gold bracelets at their price when made, even though the price of gold has tripled. He says he is still making money. Does he?

Is on firms and their goals - 2nd yr micro course...

 

[blakegman]

The markup on jewelley is more then 300%?

He entered into a futures contract to buy the jewellar yat an agreed price in future.



Just 2 things i could think of, havent done the course though so probably irrelavent

 

[Vagabond]

Not studying economics either but perhaps its to do with opportunity cost or a similar concept?

i.e. he could sell for 3x the price, therefore he's losing the difference.

I mean obviously he's still making money, just less than possible.

 

[Krieg]

yeah what vagabond said... since the price of gold only tripled after he made the bracelets, the increase in price didn't affect the cost price of the bracelets.

 

[paper cup]

i had a feeling it was to do with accounting/economic cost...
cbb figuring it out after doing my crim assign all day.
ty all