The likeliest reason the author uses the phrase "a gross exaggeration" in paragraph 1 is that he wants to clear up confusion about an issue.
The word "exaggeration" means making something appear bigger than it actually is, so if the author describes something as being a gross exaggeration, then it means he wants to clear up confusion about an issue.
In the quote, "but six dollars per pound are more money than I can afford!" it should be, "but six dollar per pound <em>is</em> more money than I can afford!"
