A Seller Decides to Sell an Object by Means of a Sealed-Bid

question 15

Multiple Choice

A seller decides to sell an object by means of a sealed-bid second-price auction without a reservation price. There are two bidders. The seller believes that for each of the two bidders there is a probability of that the bidder's value for the object is $600 and a probability of that the bidder's value is $200. The seller believes that these probabilities are independent between bidders. If the bidders bid rationally, what is the seller's expected revenue from the auction?

• A) $600
• B) $400
• C) $300
• D) $280
• E) $360

---

Definitions:

Enhancing Ratios

Financial metrics intended to improve the understanding of a company's operational efficiency and financial health.

National Performance Measures

A set of indicators used to gauge the performance of a nation in various aspects like economic health and social welfare.

Stock Market Indexes

Statistical measures that track the performance of a basket of selected stocks, representing a specific sector or market.

Asset Management Ratios

Financial metrics used to assess how efficiently a company manages its assets to generate revenue, including turnover ratios for inventory, receivables, and fixed assets.