Suppose we are interested in bidding on a piece of land and we know one other bidder is interested. The seller announced that the highest bid in excess of $10,000 will be accepted. Assume that the competitor's bid x is a random variable that is uniformly distributed between $10,000 and $15,000. (a) Suppose you bid $12,000. What is the probability that your bid will be accepted? If required, round your answer to two decimal places. .40 (b) Suppose you bid $14,000. What is the probability that your bid will be accepted? If required, round your answer to two decimal places. .80 (c) What amount should you bid to maximize the probability that you get the property? 15000 (d) Suppose you know someone who is willing to pay you $16,000 for the property. Would you consider bidding less than the amount in part (c)? Why or why not? the bid that maximizes expected profit is $ Yes 0

Suppose we are interested in bidding on a piece of land and we know one other bidder is interested. The seller announced that the highest bid in excess of $10,000 will be accepted. Assume that the competitor's bid x is a random variable that is uniformly distributed between $10,000 and $15,000. (a) Suppose you bid $12,000. What is the probability that your bid will be accepted? If required, round your answer to two decimal places. .40 (b) Suppose you bid $14,000. What is the probability that your bid will be accepted? If required, round your answer to two decimal places. .80 (c) What amount should you bid to maximize the probability that you get the property? 15000 (d) Suppose you know someone who is willing to pay you $16,000 for the property. Would you consider bidding less than the amount in part (c)? Why or why not? the bid that maximizes expected profit is $ Yes 0

College Algebra (MindTap Course List)

12th Edition

ISBN:9781305652231

Author:R. David Gustafson, Jeff Hughes

Publisher:R. David Gustafson, Jeff Hughes

Chapter8: Sequences, Series, And Probability

Section8.7: Probability

Problem 19E: If the spinner shown below is spun, find the probability of each event. Assume that the spinner...

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Question

Only Part d

Suppose we are interested in bidding on a piece of land and we know one other bidder is interested. The seller
announced that the highest bid in excess of $10,000 will be accepted. Assume that the competitor's bid x is a random
variable that is uniformly distributed between $10,000 and $15,000.
(a) Suppose you bid $12,000. What is the probability that your bid will be accepted? If required, round your answer
to two decimal places.
.40
(b) Suppose you bid $14,000. What is the probability that your bid will be accepted? If required, round your answer
to two decimal places.
.80
(c) What amount should you bid to maximize the probability that you get the property?
15000
(d) Suppose you know someone who is willing to pay you $16,000 for the property. Would you consider bidding less
than the amount in part (c)? Why or why not?
the bid that maximizes expected profit is $
Yes
O
0

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