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Brums [2.3K]
3 years ago
13

A reserve price is a minimum price set by the auctioneer. If no bidder is willing to pay the reserve price, the item is unsold a

t a profit of $0 for the auctioneer. If only one bidder values the item at or above the reserve price. An auctioneer faces two bidders, each with a value of either $30 or $80, with both values equally probable. What reserve price should the auctioneer set, and what is the expected revenue from auctioning the item with and without a reserve price?
Business
1 answer:
Marina86 [1]3 years ago
8 0

Answer:

Reserve price = $55

Expected revenue with a reserve price = $55

Expected revenue without a reserve price = $55

Explanation:

The auctioneer should set the reserve price siguiente:

Reserve price = ($30x0.5) + ($80x0.5) = $15 + $40 = $55

In the case of the expected revenue with the reserve price, only the bidder who has set a $80 value will pay the reservation fee, then the expected revenue will be the reserve fee of $55.

In the case of the expected revenue without the reserve price, both of the bidders will enter the auction for the item. Since the values are equally probable the expected profit without the reservation fee is equally $55.  

Hope this helps!

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A student has inherited $50,000. If it is placed in asavings account that earns 3% interest, how much isin the account in 30 yea
taurus [48]

Answer:

$121,363

Explanation:

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PV =  $50,000

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N = 30

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i = 3 %

FV = ?

Using a Financial calculator to enter the amounts as shown above, the FV can be determined as $121,363

8 0
3 years ago
Dallas Boot Corporation has been asked to submit a bid on supplying 1,000 pairs of military combat boots to the Armed Forces Tra
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Answer:

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Assuming that there would be no commission on this potential sale, the lowest price the firm can bid is some price greater than:_________

= $20.

Explanation:

a) Data and Calculations:

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Direct material                                     $8

Direct labor                                            6

Variable overhead                                3

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Fixed overhead (allocated)                  2

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b) The bidding price less sales commission will be a price that is greater than $20 per boot.  The extra amount per boot will cover the profit expected from the transaction.

7 0
2 years ago
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At a nominal interest rate of i i convertible semiannually, an investment of 1,000 immediately and 1,500 at the end of the first year will accumulate to 2,600 at the end of the second year. Calculate i i.
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ycow [4]
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How does globalization affect your life?
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Globalization affects all lives across the world with the world being completely connected by it.  All of the points given here are valid.

Explanation:

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