In a Sealed-Bid Auction, a Firm with a Reservation Price

question 14

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 .75, then its expected profit from the auction is:

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

---

Definitions:

Oceans Salty

The condition of seawater having high concentrations of dissolved salts, primarily sodium chloride, resulting from processes such as rock weathering and volcanic activity.

Chemical Elements

Substances consisting of atoms which have the same number of protons in their atomic nuclei, representing the simplest forms of matter that cannot be broken down using chemical reactions.

Weathering

The process by which rocks and minerals break down into smaller particles through physical or chemical means.

Gentle Slope

A terrain feature with a relatively mild incline, often found in hills, plains, and other landforms, facilitating easier movement and agriculture.