Oh, absolutely. I wasn't questioning whether it would be sold for the price discussed here. I was wondering why the appraisal was that low (turns out: because the appraisal on the website is an unrelated sample and the appraisal in the video was mistranscribed by missing out several digits so the subtitles were off by orders of magnitude).
There are a lot of areas where the label price is based on some underlying much lower value with somewhat standardized factors being applied so I was wondering if there's some implicit "everyone knows this" translation from the "appraisal" to the sale price I wasn't aware of. Hence me pointing out that that would be quite the markup so there is probably more to it than just profit.
in first-year 'Contracts,' 1L's study that the 'fair market value' of any good or service is defined by Black's Law Dictionary, amongst elsewhere, as "[t]he price that a seller is willing to accept and a buyer is willing to pay on the open market and in an arm's-length transaction [ . . . ]"
this definition captures the actual sale price of almost any transaction imaginable quite comprehensively—which is what most people are really asking when curious about the 'value' of a good, like a precious gemstone, or a service.
NB: 'value' is defined by the same as "1. The significance, desirability, or utility of something" or "2. The monetary worth or price of something; the amount of goods, services, or money that something commands in exchange." 'markup' as "[a]n amount added to an item's cost to determine its selling price."
I'm not sure who you're explaining this to and why because it's largely orthogonal to what I said.
The cut gem's label price is based on an appraisal. The appraisal is based on the market rate (a real-world approximation of the theoretical "fair market value" you explained) of comparable gems.
Because based on both the mistranscribed video and the sample appraisal the appraisal seemed to be much lower than the asking price on the website, I assumed this might be because the appraisal is incomplete and doesn't take into account some factor that might be well-known in the industry to not warrant any mention in the video but still contribute significantly to the final price. Notably, just because the appraisal was specified as a dollar amount that does not eliminate the possibility it might refer to something other than a USD sale price.
Given that a lot of luxury goods and collector's items are auctioned off at vastly inflated prices (often as speculative investment or simply money laundering and complex tax write-off schemes), I would have found this surprising but not implausible. Another example would be insurance where "value" might either be the cost to replace something or the depreciated value of the same item, which can be a very different amount (again by orders of magnitude).
disagree. we're just exchanging thought-provoking ideas here, man. wasn't coming at you or thinking i hold some kind of edification authority over anyone here even in the slightest.
There are a lot of areas where the label price is based on some underlying much lower value with somewhat standardized factors being applied so I was wondering if there's some implicit "everyone knows this" translation from the "appraisal" to the sale price I wasn't aware of. Hence me pointing out that that would be quite the markup so there is probably more to it than just profit.