Explanation Given: Three partners ( A, B and C ) jointly own a business but wish to dissolve the partnership using the method of sealed bids. One of the partners will keep the business; other two will each get cash for their one-third share of the business. Suppose that A bids $ x , B bids $ y , and C bids $ z . Assume that C is the high bidder. Calculation: C is the high bidder and keeps the business, he must pay A and C for their share The values of A ’s fair share is x 3 , the value of B ’s fair share is y 3 , the value of C ’s fair share is z 3 . Person C ’s fair share is z 3 , so he keeps the business which is of worth $ z and must pay the difference. z − z 3 = 2 z 3 …… ( 1 ) Subtract the sum of B ’s fair share and A ’s fair share from the ( 1 ) to calculate the value of surplus. The surplus amount is, 2 z 3 − ( x 3 + y 3 ) = 2 z − x − y 3 Each partner’s share of the surplus is, 1 3 ( 2 z − x − y 3 ) = 2 z − x − y 9 Partner A get the full share x 3 and the fair share of surplus. The amount to be paid by C to A is as follows

Student's Solutions Manual For Excursions In Modern Mathematics Format: Paperback

9th Edition

ISBN: 9780134469133

Author: Tannenbaum, Peter

Publisher: Prentice Hall

See similar textbooks

Concept explainers

Sequence and Series

A sequence is defined as a collection of things. Series is defined to sum the things one by one in the sequence. It was invented by German mathematician Carl Friedrich Gauss.

Videos

Question

Chapter 3, Problem 64E

To determine

To describe:

The final settlement of fair division of x,y and z.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 3, Problem 63E

Chapter 3, Problem 65E

Students have asked these similar questions

Four heirs (A, B, C, and D) must fairly divide an estate consisting of two items - a desk and a vanity - using the method of sealed bids. The players' bids (in dollars) are: A B C D Desk 220 300 240 280 Vanity 180 100 120 160 The original fair share of A is worth: $ In the initial allocation, player A: and the estate $After all is said and done, in the final allocation, player A: and the estate $

In this version of the ultimatum game experiment, one participant is given £100, and is told to offer to split that amount with another participant. The second player can either refuse to accept the division, in which case the participant receiving the £100 has to give it back, or can accept the division, in which case, the player receiving the money splits the £100 as proposed. We can explain how the participant who receives the money, and makes the proposal decides on it by arguing that A) There is a need to appear fair, and that can be done by offering a quarter of the money (£25) to the other participant. B) To avoid the risk of the offer being rejected, the optimal strategy is to offer whatever might be considered normal in such a situation, and this might be around £10. C) Anticipating that the other player is rational, the optimal strategy is to offer the smallest possible amount (£0.01) on the basis that receiving something is better than receiving nothing at all. D)…

A punch-out card contains 100 spaces. One space pays $200, five spaces pay $10, and the others pay nothing. How much should you pay to punch out one space? (Assume that you wish to pay the fair price.

Chapter 3 Solutions

Student's Solutions Manual For Excursions In Modern Mathematics Format: Paperback

Ch. 3 - Henry, Tom, and Fred are breaking up their...Ch. 3 - Alice, Bob, and Carlos are dividing among...Ch. 3 - Angie, Bev, Ceci, and Dina are dividing among...Ch. 3 - Mark, Tim, Maia, and Kelly are dividing among...Ch. 3 - Allen, Brady, Cody, and Diane are sharing a cake....Ch. 3 - Carlos, Sonya, Tanner, and Wen are sharing a cake....Ch. 3 - Four partners Adams, Benson, Cagle, and Duncan...Ch. 3 - Prob. 8E Ch. 3 - Suppose that Angelina values strawberry cake twice...Ch. 3 - Suppose that Brad values chocolate cake thrice as...

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, subject and related others by exploring similar questions and additional content below.