The Price of Rice - The Answer
Yesterday I posted a story my father told me relating to entrepreneurship, The Price of Rice. I had a few interesting comments that highlighted how my fellow entrepreneurs/readers think like business men/women.
Bob - “One thing that came to mind was Adam is cooking the rice before selling it which would make it weigh more than Akbar rice.” - I never thought of this and don’t know any retailor that cooks rice before selling it but good suggestion!
Aaron - “Perhaps Adam is selling a larger volume of rice which decreases his cost price. ” - Econonmies of Scale would allow for this, but in this story, the prices are controlled by the government so unfortunately it is not correct. Thanks for your submission though!
Luke - “Adam is using the method of drawing customers in using a cheap price and making them buy others things from his shop, just like some of the big boys do now!” - This is a possible answer (not the answer I have), well done!
Anand - “Adam gets his investment very fast so he does not pay any rate of interest. He is building a customer base and also making their mindset that everything is cheaper which might not be” - This could be an answer but there was no mention of interest or loans so unfortunately it is not correct. Thanks for your submission though!
The answers you supplied are all plausible generally, but for this story the true answer lies here:
“Both shopkeepers bought rice at 10p per kilogram in 100 kilogram sacks“
Adam’s answer to Akbar’s question - “Once I have sold all the rice in the sack, I then sell the sack“.
Good luck with your persuits,
Khalid.
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