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 $9,900 will be accepted. Assume that the competitor's bid is a random variable that is uniformly distributed between $9,900 and $14,900. a. Suppose you bid $12,000. What is the probability that your bid will be accepted (to 2 decimals)? b. Suppose you bid $14,000. What is the probability that your bid will be accepted (to 2 decimals)? c. What amount should you bid to maximize the probability that you get the property?
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 $9,900 will be accepted. Assume that the competitor's bid is a random variable that is uniformly distributed between $9,900 and $14,900. a. Suppose you bid $12,000. What is the probability that your bid will be accepted (to 2 decimals)? b. Suppose you bid $14,000. What is the probability that your bid will be accepted (to 2 decimals)? c. What amount should you bid to maximize the probability that you get the property?
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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![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 $9,900 will be accepted. Assume that the competitor's bid is a random variable that is uniformly distributed
between $9,900 and $14,900.
a. Suppose you bid $12,000. What is the probability that your bid will be accepted (to 2 decimals)?
b. Suppose you bid $14,000. What is the probability that your bid will be accepted (to 2 decimals)?
c. What amount should you bid to maximize the probability that you get the property?
$
d. Suppose that you know someone is willing to pay you $16,000 for the property. You are considering bidding the amount shown in part
(c) but a friend suggests you bid $12,950. Which bid will give you the larger expected profit?
- Select your answer -
What is the expected profit for this bid (to 2 decimals)?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F78dcd009-b17a-4acd-b9a3-10d200fc1412%2F79ac0b4b-a715-4fbb-a5a8-dc6c4a89f358%2Fxjrss0w_processed.png&w=3840&q=75)
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 $9,900 will be accepted. Assume that the competitor's bid is a random variable that is uniformly distributed
between $9,900 and $14,900.
a. Suppose you bid $12,000. What is the probability that your bid will be accepted (to 2 decimals)?
b. Suppose you bid $14,000. What is the probability that your bid will be accepted (to 2 decimals)?
c. What amount should you bid to maximize the probability that you get the property?
$
d. Suppose that you know someone is willing to pay you $16,000 for the property. You are considering bidding the amount shown in part
(c) but a friend suggests you bid $12,950. Which bid will give you the larger expected profit?
- Select your answer -
What is the expected profit for this bid (to 2 decimals)?
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