What Is the Optimal Bid for a Descending-Price Auction If

question 10

Multiple Choice

What is the optimal bid for a descending-price auction if the bidder's reservation price is 8,the lowest possible bid is 3,and there are five bidders?

• A) 3.
• B) 6.
• C) 7.
• D) 8.
• E) None of the above.

---

Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded at various prices.

Quantity Demanded

The specific amount of a good or service consumers are willing to buy at a given price point, holding all else constant.

Quantity Supplied

The total amount of a good that producers are willing to sell at a given price over a specific time period.

Shortage

A situation in which demand for a good or service exceeds the available supply at a specific price.