Asked by Janysh Kudaibergenov on Jun 03, 2024
Verified
Anna's Antiques expects to get two 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 Anna holds an auction between the two bidders,and both have high values,she would earn ___ from the auction.
A) Just above $100
B) $100
C) Just above $70
D) $70
High-Value
Referring to objects, services, or properties that possess a considerable worth or quality.
Expected Value
A calculation used in statistics and gambling to determine the average outcome of a series of random events, taking into account all possible scenarios and their probabilities.
Low-Value
Describes products, services, or assets that are considered to have a minimal worth or importance in comparison to others.
- Determine expected financial outcomes and interpret the worth ascribed by bidders through auction results.
Verified Answer
ZK
Zybrea KnightJun 04, 2024
Final Answer :
B
Explanation :
If both bidders have high values and they both bid, Anna will receive the highest bid of $100. This is the maximum amount she can earn from the auction.
Learning Objectives
- Determine expected financial outcomes and interpret the worth ascribed by bidders through auction results.