Consider an Auctioneer Who Is Selling an Item Through an Auction.It

question 58

Multiple Choice

Consider an auctioneer who is selling an item through an auction.It is known that the 25 risk-neutral bidders have affiliated values that are distributed between $0 and $500 million.Based on this information the auction type that will maximize expected revenue is

• A)English auction.
• B)Second-price, seal-bid auction.
• C)First-price, sealed-bid auction and Dutch auction.
• D)English auction and Second-price, seal-bid auction.

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Definitions:

Fixed Costs

Costs that do not change with the amount of goods or services produced, such as rent, salaries, or insurance.

Accounting Profit

Profits as shown on a company’s financial statements. Accounting profit does not necessarily correspond to real or economic profit.

Variable Costs

Costs that vary directly with the level of production or a company's output, such as materials and labor.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.