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e you bid $12,000.

e you bid $12,000.

College Algebra
College Algebra
10th Edition
ISBN:9781337282291
Author:Ron Larson
Publisher:Ron Larson
Chapter8: Sequences, Series,and Probability
Section8.7: Probability
Problem 50E: Flexible Work Hours In a recent survey, people were asked whether they would prefer to work flexible...
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Suppose we are interested in bidding on a piece of land and we know one other bidder is interested. The seller announced that the highest bid in excess of $10,300 will be accepted. Assume that the competitor's bid x is a random variable that is uniformly distributed between $10,300 and $15,100. a. Suppose you bid $12,000. What is the probability that your bid will be accepted (to 2 decimals)? .35 b. Suppose you bid $14,000. What is the probability that your bid will be accepted (to 2 decimals)? .77 c. What amount should you bid to maximize the probability that you get the property (in dollars)? 15100 d. Suppose that you know someone is willing to pay you $16,000 for the property. You are considering bidding the amount shown in part (c) but a friend suggests you bid $13,150. If your objective is to maximize the expected profit, what is your bid? Bid $13150 to maximize the expected profit What is the expected profit for this bid (in dollars)?
Transcribed Image Text:Suppose we are interested in bidding on a piece of land and we know one other bidder is interested. The seller announced that the highest bid in excess of $10,300 will be accepted. Assume that the competitor's bid x is a random variable that is uniformly distributed between $10,300 and $15,100. a. Suppose you bid $12,000. What is the probability that your bid will be accepted (to 2 decimals)? .35 b. Suppose you bid $14,000. What is the probability that your bid will be accepted (to 2 decimals)? .77 c. What amount should you bid to maximize the probability that you get the property (in dollars)? 15100 d. Suppose that you know someone is willing to pay you $16,000 for the property. You are considering bidding the amount shown in part (c) but a friend suggests you bid $13,150. If your objective is to maximize the expected profit, what is your bid? Bid $13150 to maximize the expected profit What is the expected profit for this bid (in dollars)?
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