You and two other people are to place bids for an object, with the high bid winning. If you win, you plan to sell the object immediately for 10,000. (a) How much should you bid to maximize your expected profit if you believe that the bids of the others can be regarded as being independent and uniformly distributed between 7,000 and 10,000?

You and two other people are to place bids for an object, with the high bid winning. If you win, you plan to sell the object immediately for 10,000. (a) How much should you bid to maximize your expected profit if you believe that the bids of the others can be regarded as being independent and uniformly distributed between 7,000 and 10,000?

Intermediate Algebra

19th Edition

ISBN:9780998625720

Author:Lynn Marecek

Publisher:Lynn Marecek

Chapter12: Sequences, Series And Binomial Theorem

Section12.3: Geometric Sequences And Series

Problem 12.58TI: What is the total effect on the economy of a government tax rebate of $500 to each household in...

See similar textbooks

Similar questions

What is the total effect on the economy of a government tax rebate of $500 to each household in order to stimulate the economy if each household will spend of the rebate in goods and services?
Let x1 and x2 be the payoffs of two investment
Class Exercise 2: Player I holds a black Ace and a red 8. Player II holds a red 2 and a black 7. The players simultaneously choose a card to play. If the chosen cards are of the same color, Player I wins. Player II wins if the cards are of different colors. The amount won is a number of rands equal to the number on the winner's card (Ace counts as 1.) Set up the payoff function.
3. Tamir has recently begun a new job of selling custom bracelets! Tamir's sales have been growing every week and now he is looking to analyze his profit. Specifically, Tamir is looking to find how much his cost of goods is for his business of selling bracelets. Luckily, Tamir sells each bracelet for the same price and has recorded that when he sold 4 bracelets he made a $39 profit, when he sold 9 bracelets he made a $94 profit. a. Write an equation in point slope form that could model this scenario. b. Which of the following could be the graph of Tamir's profit? Explain how you know. Graph 1: Graph 2: + +
Cheryl is considering purchasing additional sewing machines to accommodate the increasing demand for her cosplay costumes. Her alternatives are to buy 1 machine, 2 machines, or 3 machines. The profits realized under each alternative are a function of whether her proposal to bid for clothing the official Bandai team is accepted or not. The payoff table below illustrates the profits realized (in $000's) based on the different scenarios Cheryl faces. The probability that her proposal will be accepted is 65%. Alternative Proposal Accepted Proposal Rejected Purchase 1 sewing machine $10 $5 Purchase 2 sewing machines $30 $4 Purchase 3 sewing machines $40 $2 What alternative should Cherly select if she is pessimistic? What alternative should Cherly select based on a criterion of realism with ?α = 0.8?
Suppose that you inherit $10 comma 00010,000. The will states how you must invest the money. Some (or all) of the money must be invested in stocks and bonds. The requirements are that at least $30003000 be invested in bonds, with expected returns of $0.140.14 per dollar, and at least $20002000 be invested in stocks, with expected returns of $0.190.19 per dollar. Because the stocks are medium risk, the final stipulation requires that the investment in bonds should never be less than the investment in stocks. How should the money be invested so as to maximize your expected returns? To maximize the expected returns, invest $60006000 in bonds and $60006000 in stocks.
A local softball league is raffling off $1000.00. You can buy one ticket for $5.00, three tickets for $13.00 five tickets for $20.00 or ten tickets for $30.00. Assume the league sells 500 tickets. Should you buy one, three, five, or ten tickets to maximize your expected winnings?
You are analyzing stocks of three companies you are interested in investing in. Suppose that these three stocks are Apple stock (AAPL), Microsoft (MSFT), and Tesla (TSLA). At the end of this month, each month may move up (increase in value), move down (decrease in value) or stay the same. In this case, an experiment consists of observing the price condition across the three stocks. Each of the three conditions (move up, move down, stay same) are equally likely. How many outcomes are in the sample space? List 7 of the outcomes. (use U for move up, D for moving down and S for staying the same) Let A be the event that all the stocks have the same performance. List the outcomes in A. Let B be the event that all of stocks are different. List the outcomes in B. Let C be the event that at least two stocks move up. Are events A and C mutually exclusive? Are events B and C mutually exclusive? What is the probability of ? What is the probability of ? What is the probability of ? What is the…
You are analyzing stocks of three companies you are interested in investing in. Suppose that these three stocks are Apple stock (AAPL), Microsoft (MSFT), and Tesla (TSLA). At the end of this month, each month may move up (increase in value), move down (decrease in value) or stay the same. In this case, an experiment consists of observing the price condition across the three stocks. Each of the three conditions (move up, move down, stay same) are equally likely. How many outcomes are in the sample space? List 7 of the outcomes. (use U for move up, D for moving down and S for staying the same) Let A be the event that all the stocks have the same performance. List the outcomes in A. Let B be the event that all of stocks are different. List the outcomes in B. Let C be the event that at least two stocks move up. Are events A and C mutually exclusive? Are events B and C mutually exclusive? What is the probability of ? What is the probability of ? What is the probability of ? What is the…
The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable costs (cleaning, bathroom items, etc.) each night a room is occupied. For each reservation accepted, there is a 5% chance that the guest will not arrive. If the hotel overbooks, it costs $200 to compensate guests whose reservations cannot be honored. How many reservations should the hotel accept if it wants to maximize the average daily profit?