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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?

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
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)?
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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