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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 that the highest bid in excess of \$10 200 will be accepted Assume that the

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, 200 will be accepted. Assume that the competitor&#39;s bid x is a random variable that is uniformly distributed between \$10, 200 and \$14, 700. a. Suppose you bid \$12,000. What is the probability that your bid will be accepted (to 2 decimals)? b. Suppose you bid \$14,000. What is the probability that your bid will be accepted (to 2 decimals)? c. What amount should you bid to maximize the probability that you get the property? d. Suppose that you know someone is willing to pay you \$16,000 for the property. You are considering bidding the amount shown in part (c) but a friend suggests you bid \$13, 100. If your objective is to maximize the expected profit, what is your bid? What is the expected profit for this bid (to 2 decimals)?

Aug 01 2020 View more View Less Subscribe To Get Solution