Suppose we are interested in Bidding on a piece of land and we know one other bidder is interested. The seller announced

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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 1 (23.53 KiB) Viewed 24 times

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 compted. Assume that the competitor's bid is a random vartable that is uniformly distributed between $10,000 and $15,000 () Suppose you bid $12,000. What is the probability that your bid will be accepted? () suppose you bid $14,000. What is the probability that your bid will be accepted? (c) What amount should you bed in dollars to maximize the probability that you get the property? $ (d) Suppose you know someone who is willing to pay you $16,000 for the property What is the expected profit in dollars if you bid the amount given in part (c)? Find a bed in dotter which produces a greater expected profit than bidding the amount given in port (e) (at an answer does not excet, ester one.) Would you consider bidding less than the amount in part ( Why or why not? Yes. There is a bid which gives a greater expected profit than the bid given in part (c)and thus a higher expected profit is possible with a wider than the amount in part (e) No. The bid which maximize the expected profit is the amount given in part (c), thus it does not make sense to place a male bid.