Which of the following statements about competitive bidding is/are true?
i. The higher the price that is bid, the greater the profit, if the firm gets the contract.
ii. Bidding a higher price increases the probability of obtaining the contract.
iii. A company bidding low enough to ensure the acceptance of a contract may have bid too low to make an acceptable profit on the job.

Question

Quizplus · Accepted Answer

Option i is true because a higher bid price increases the profit if the company gets the contract.
Option ii is not always true as the probability of obtaining the contract depends on various factors such as the quality of the proposal, experience of the bidders and the price offered.
Option iii is also true because bidding too low to win a contract may result in a profit margin that is not acceptable to the bidder.

Which of the Following Statements About Competitive Bidding Is/are True