Anna's Antiques expects to get three bidders for the unique china teacup it sells.Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability.If three bidders show up at the auction and all of them are high-value bidders,what would the winning bid be?
A)Just above $100
B)$100
C)Just above $70
D)$70

Question

Anna's Antiques expects to get three bidders for the unique china teacup it sells.Each of the bidders can either have a high-value of $100 or a low-value of $70 with equal probability.If three bidders show up at the auction and all of them are high-value bidders,what would the winning bid be?
A)​Just above $100
B)$100
C)Just above $70
D)​$70

Quizplus · Accepted Answer

Since all three bidders are high-value bidders, the highest bid that can be made will be $100. None of the bidders will bid less than the maximum value they are willing to pay. Therefore, the winning bid will be $100.

Anna's Antiques Expects to Get Three Bidders for the Unique