[Paddy]

Originally Posted by ZuerstBMW

He lost 20.00 total. 7.00 cash he gave the customer back, 10.00 he gave the other vendor and 3.00 ( price of the widget)

He got $3 (good dollars for his widget_ so he lost nothing on the widget. The $7 change (Good money) went to the buyer. The Seller replaced the exchangers $10 so his total loss was $10.
Another way of looking at it is, gain must equal loss.
In a normal exchange, buyer loses $3, and gains $3 widget, seller gains $3 and loses a Widget worth $3. In the fraud case the buyer lost nothing and gained $10 ($3 widget + $7 change), therefore the sellers loss must have been $10.

In reality the seller lost $10 - (his profit on the widget).

[achien]

$7 (cash) + cost of widget

p.s. the neighbor is used to distract people from realizing the actual solution.

[stooken]

Originally Posted by Hawkeye

This is wrong actually. The price of a widget is $3 for a reason, it is most likely the minimum price that he would accept to cover his losses for the purchase of the widget and the time and effort he spent trying to sell that one widget. He does not make a straight $3 profit from selling a widget or even $3 - cost of the widget for that matter.

The correct answer is he lost $10.

Ok so the $3 profit was worded incorrectly but it's still $7 + the cost of the widget.

He didn't lose $10 because you do not know what the cost of the widget is. You just know his retail price is $3. If the cost of the widget was $3 then you are correct, it's $10 but nowhere in the statement does it say the cost is $3.

I think your $10 includes opportunity cost. You're saying he lost out on $3 he could've made but I think the question is how much did he lose out of pocket?

[shiggy]

Originally Posted by stooken

Ok so the $3 profit was worded incorrectly but it's still $7 + the cost of the widget.

He didn't lose $10 because you do not know what the cost of the widget is. You just know his retail price is $3. If the cost of the widget was $3 then you are correct, it's $10 but nowhere in the statement does it say the cost is $3.

I think your $10 includes opportunity cost. You're saying he lost out on $3 he could've made but I think the question is how much did he lose out of pocket?

ok....i was way off.....i thought it was $3,999.38
someone get me a calculator.

[TurboFan]

He's out $10-profit on the widget.