Answer Happy

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 $15,000 will be accepted. Assume that the competitor's bid is a random variable that is uniformly distributed between $15,000 and $20,000 () Suppose you bid $17,000. What is the probability that your bid will be accepted (b) Suppose you bid $19,000. What is the probability that your bid will be accepted? (c) What amount should you bid in dollars to maximize the probability that you get the property? $ (d) Suppose you know someone who is willing to pay you $28,000 for the property What is the expected profit in dollars il you bid the amount given in parte? 5 Pied and in dollar which produces a greater expected profit than bidding the amount oven in part (e) (if an answer does not enter DNE) 5 Would you consider bidding less than the amount in partoWhy or why not? Yes. There is a bid which gives a greater expected profit than the bad given in parte), and thus a higher expected profit is possible with a wider than the amount in No. The bid which maromize the expected profit is the amount given in part (e), thus it does not make sense place a smaller bid