Scenario: Rebecca is participating in a Dutch auction for an antique necklace. The total number of bidders in this auction is ten. Rebecca values the necklace at $45,000, while all the other bidders value it below $45,000.
-Refer to the scenario above.The seller will earn a revenue of ________.

Question

Quizplus · Accepted Answer

In a Dutch auction, the price starts high and gradually decreases until a bidder is willing to buy at the current price. Since Rebecca values the necklace at $45,000 and all other bidders value it below $45,000, it is likely that the final sale price will be somewhere between $45,000 and the lowest value placed by the other bidders. Let's assume that the final sale price is $40,500 (the value given by the bidder who placed the highest value below $45,000). In this case, the seller will earn a revenue of $40,500 (the final sale price), which is less than Rebecca's valuation of $45,000. Therefore, the best choice is B, with a revenue of $40,500.

Scenario: Rebecca Is Participating in a Dutch Auction for an Antique