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If he dyed it poorly, the dyer gets the lesser of the improvement to the wool and his expenses. Since he knew that using inferior dye would result in an inferior product, he is a damager. His compensation claim is that he did, in fact, increase the value.
If he was supposed to dye red, and he dyed black, Rabbi Meir says that he pays the value of wool, but Rabbi Yehudah awards the claim as above.
Art: Untitled by Mark Rothko
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