-|-x| = 7 is already wrong to begin with. The absolute value gives you the distance from zero so it is always positive. And the fact that if |-x| is always positive then -|-x| is always negative and you are equating it to a positive number.
I think the answer is C. "He made a place value error when dividing. If he would have divided 1.09 by 8, he would have found the price of each individual pen.
