In a Sealed-Bid Auction,a Firm with a Reservation Price of $48,000

question 7

Multiple Choice

In a sealed-bid auction,a firm with a reservation price of $48,000 submits a bid of $40,000.If its probability of winning is 0.75,then its expected profit from the auction is _____.

• A)$8,000
• B)$2,000
• C)$6,000
• D)$4,000
• E)$2,500

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Definitions:

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting its decrease in value over time.

Exchange Rate

The value of one currency for the purpose of conversion to another currency.

Depreciate

To decrease in financial value over time, particularly in reference to assets like vehicles or machinery.

Supply

The total amount of a specific good or service available for purchase at any given price in a market.