At the end of performances of his Broadway play, "Cyrano de Bergerac," Kevin Kline, who starred as Cyrano, the cavalier poet with a huge nose, auctioned his prosthetic proboscis, which he and his co-star, Jennifer Garner, autographed to benefit Broadway Cares in its fight against AIDS. An English auction was used. One night, a television producer grabbed the nose for $1,400, while the next night it fetched $1,600. On other nights it sold for $3,000 and $900. Why did the value fluctuate substantially from night to night? The value of the nose fluctuated from night to night because the bidders have private values for the auction item. Which bidder's bid determined the sales price? The bidder whose value determined the sales price was the bidder.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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At the end of performances of his Broadway play, "Cyrano de Bergerac," Kevin Kline, who
starred as Cyrano, the cavalier poet with a huge nose, auctioned his prosthetic proboscis,
which he and his co-star, Jennifer Garner, autographed to benefit Broadway Cares in its fight
against AIDS.
An English auction was used. One night, a television producer grabbed the nose for $1,400,
while the next night it fetched $1,600. On other nights it sold for $3,000 and $900.
Why did the value fluctuate substantially from night to night?
The value of the nose fluctuated from night to night because the bidders have private
values for the auction item.
Which bidder's bid determined the sales price?
The bidder whose value determined the sales price was the
bidder.
second-lowest
second-highest
lowest
highest
Transcribed Image Text:At the end of performances of his Broadway play, "Cyrano de Bergerac," Kevin Kline, who starred as Cyrano, the cavalier poet with a huge nose, auctioned his prosthetic proboscis, which he and his co-star, Jennifer Garner, autographed to benefit Broadway Cares in its fight against AIDS. An English auction was used. One night, a television producer grabbed the nose for $1,400, while the next night it fetched $1,600. On other nights it sold for $3,000 and $900. Why did the value fluctuate substantially from night to night? The value of the nose fluctuated from night to night because the bidders have private values for the auction item. Which bidder's bid determined the sales price? The bidder whose value determined the sales price was the bidder. second-lowest second-highest lowest highest
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