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.If Rebecca wins the auction,she will earn a surplus of ________.

Question

Quizplus · Accepted Answer

Rebecca's surplus is the difference between her valuation of the necklace and the price she pays for it. Since she values the necklace at $45,000 and all the other bidders value it below $45,000, she will win the auction at a price below $45,000. Therefore, her surplus will be greater than $0. The only option that is greater than $0 is B) $4,500.

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