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Melissa Faraj owns a lot and wants to build a house according to a particular set of plans and specifications. She solicits bids from building contractors and receives three bids: one from Carlton for $160,000, one from Feldberg for$158,000, and one from Siegel for $153,000. She accepts Siegel’s bid. One month after beginning construction of the house, Siegel contacts Faraj and tells her that because of ination and a recent price hike for materials, his costs have gone up. He says he will not nish the house unless Faraj agrees to pay an extra$13,000. Faraj reluctantly agrees to pay the additional sum.
(a) One group will discuss whether a contractor can ever raise the price of completing construction because of inflation and the rising cost of materials.