Asked by Charles Jackson on Jul 09, 2024

verifed

Verified

Anna's Antiques expects to get three bidders for the unique china teacup it sells.Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability.If three bidders show up at the auction and two of the bidders are low value,what would the winning price be?

A) ​Just above $100
B) $100
C) Just above $70
D) ​$70

High-value

Attributes or items considered to have a significant worth or importance, either in monetary terms or in qualitative aspects such as quality or utility.

Winning Price

The final bid amount that secures an item or service in an auction; the price at which the auction is won.

Low-value

Pertaining to items or services that are considered to have less worth or importance, often reflected in their low cost.

  • Ascertain the consequences of bidder valuation variances on the outcomes of auctions.
verifed

Verified Answer

PA
Persephone AngeliJul 15, 2024
Final Answer :
C
Explanation :
Since two of the bidders have a low-value of $70, it is more likely that the winning bidder will choose a bid at or just above the low-value price rather than going for the high-value price. Therefore, the winning price is likely to be just above $70.