Saturday, November 1, 2008

A Coffee fueled over-analysis

Another dentist is offering to purchase Halloween candy from children, with the purchased candy going to US troops. This dentist is offering $1 a pound, as opposed to the other dentist who is offering 50 cents a pound. Both dentists also include a toothbrush in the deal. The first dentist could arbitrage the second dentist by selling him all the candy she purchased for 50 cents a pound for $1 a pound. Depending on how the cost of the tooth brushes factor in, this could be profitable. This would also allow the first dentist to make the second dentist bear all of the overseas shipping costs which could be substantial. As long as the candy gets to US troops, the first dentist is not breaking the contract with the seller of the candy. Of course, you have to factor in the opportunity cost of the first dentist to engage in this transaction when she could be cleaning teeth for $150 an hour...