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
Holt Mcdougal Larson Pre-algebra: Student Edition 2012
1st Edition
ISBN:9780547587776
Author:HOLT MCDOUGAL
Publisher:HOLT MCDOUGAL
Chapter11: Data Analysis And Probability
Section11.8: Probabilities Of Disjoint And Overlapping Events
Problem 2C
Related questions
Question
Only Part d
Only Part d
Transcribed Image Text: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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Recommended textbooks for you
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL
College Algebra
Algebra
ISBN:
9781305115545
Author:
James Stewart, Lothar Redlin, Saleem Watson
Publisher:
Cengage Learning
Holt Mcdougal Larson Pre-algebra: Student Edition…
Algebra
ISBN:
9780547587776
Author:
HOLT MCDOUGAL
Publisher:
HOLT MCDOUGAL
College Algebra
Algebra
ISBN:
9781305115545
Author:
James Stewart, Lothar Redlin, Saleem Watson
Publisher:
Cengage Learning
College Algebra (MindTap Course List)
Algebra
ISBN:
9781305652231
Author:
R. David Gustafson, Jeff Hughes
Publisher:
Cengage Learning
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:
9781133382119
Author:
Swokowski
Publisher:
Cengage