Described his contract negotiation methods and pricing

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Donald Trump described his contract negotiation methods and pricing as follows, "When I build something for somebody, I always add $50 million or $60 million onto the price. My guys come in, they say it's going to cost $75 million. I say it's going to cost $125 million and I build it for $100 million. Basically, I did a lousy job, But they think I did a great job." Evaluate this quote, thinking through the economic implications of this pricing. Discuss the following questions, providing analysis: 1. Who is affected by the Trump approach? 2. Is Trump simply managing expectations? 3. Is he misleading the other party(ies)? 4. Is he taking unfair advantage? 5. What happens if pricing does not reflect costs if a lawsuit over breach of contract occurs? 6. How would damages be calculated if a breach of contract lawsuit was filed by Trump for nonpayment/performance? 7. What would happen if all contractors did this? 8. Would this behavior rise to the level of misrepresentation? If so, how?

Reference no: EM131043120

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