Jack wants to have a conservatory built in his house. He writes to three builders, Bob, Ken and Andy, asking them to submit estimates. In the letters Jack sets down his specifications for the conservatory and, furthermore, states that he will accept the

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QUESTION:

Jack wants to have a conservatory built in his house. He writes to three builders, Bob, Ken and Andy, asking them to submit estimates. In the letters Jack sets down his specifications for the conservatory and, furthermore, states that he will accept the "most competitive" tender.

Bob writes back saying that he will do the work for £10,000. Ken replies saying that he will charge £12,000 for the work. Andy never receives Jack's letter because it was misaddressed by Jack. As luck would have it though, Andy writes to all the houses in Jack's street offering to build conservatories, which happen to match Jack's specifications, for £8,000.

Having received the letters of all three builders, Jack hears from his neighbour, Barney, that Ken is an excellent builder. Jack accordingly contacts Ken to say that he will be employing him to do the building work.

Work proceeds. Meanwhile, Jack, who has moved to his second home in Birmingham while the work is underway, is having cash flow problems. He writes to Ken to say that he may not be able to pay Ken the agreed price of £12,000. Jack proposes that