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A perfectly competitive firm maximizes its profit by setting its price so that it exceeds the marginal revenue

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A perfectly competitive firm maximizes its profit by setting its price so that it exceeds the marginal revenue. manipulating demand. choosing to produce the quantity that sets MC equal to MR. cutting wages.

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Texas AampM International University ECO 3320 CHAPTER 18 1An oral auction is also called an English auction is where bidders submit increasing bids until all but one remains is where the sole remaining bidder wins and pays his winning bid all of the above A secondprice auction is also called a Vickrey auction is conducted by bidders submitting a single sealed bid is where the highest bidder wins and pays the amount of the next highest bid all of the above An oral auction is also called a Vickrey auction is where bidders submit increasing bids until all but one remains is where the highest bidder wins and pays the amount of the next highest bid all of the above A secondprice auction is also called an English auction is where the highest bidder wins and pays the amount of the next highest bid is where the sole remaining bidder wins and pays his winning bid all of the above An oral auction is also called a Vickrey auction is conducted by bidders submitting a single sealed bid is where the sole remaining bidder wins and pays his winning bid all of the above A secondprice auction is also called a Vickrey auction is where bidders submit increasing bids until all but one remains is where the sole remaining bidder wins and pays his winning bid all of the above The optimal bidding strategy for an oral auction is To shade your bid below your true value and drop out well before it is reached To shade your bid below your true value and drop out just when the shaded amount is reached To bid drop out when the bidding exceeds your true value To size up your competition to determine how much to shade your bid The optimal bidding strategy for a secondprice auction is To bid your true value To shade your bid well below your true value To shade your bid just a little below your true value To size up your competition to determine how much to shade your bid If the bidders at an oral auction have true values of 8 7 6 and 5 the item will sell for 8 7 just over 7 just under 7 If the bidders at a secondprice auction have true values of 8 7 6 and 5 the item will sell for 8 7 just over 7 just under 7 If the bidders at an oral auction have true values of 78 72 66 and 65 the item will sell for a 78 b just under 78 c 72 d just over 72 If the bidders at a secondprice auction have true values of 78 72 66 and 65 the item will sell for a 78 b just under 78 c 72 d just over 72 The more bidders there are at an oral auction the higher the expected selling price the higher each bidder bids the longer that each bidder will continue to bid the less each bidder will shade his bid The more bidders there are at a secondprice auction the higher the expected selling price the higher each bidder bids the more each bidder will shade his bid the less each bidder will shade his bid More bidders increase the selling price at an oral auction because bidders bid more aggressively the true value of the winner is higher the true values of the losers is higher bidders shade their bids by less More bidders increase the selling price in a secondprice auction because the true values of the losers is higher the true value of the winner is higher bidders bid more aggressively bidders shade their bids by less Ebay39s use of quotbidding agentsquot will effectively turn an English auction into a Vickery auction effectively turn a Vickery auction into an English auction decide how much to shade your bid for you make you a more aggressive bidder Firstprice auctions have all the following properties EXCEPT Highest bid wins Highest bidder pays her winning bid The good is assigned to the secondhighest bidder The price is set to the highest bid Firstprice auctions have all the following properties EXCEPT Highest bid wins Highest bidder pays the second highest bid The good is assigned to the highest bidder The price is set to the highest bid If the bidders at a firstprice auction have true values of 78 72 66 and 65 the item will sell for a 78 b just under 78 c 72 d just over 72 If the bidders at a firstprice auction have true values of 8 7 6 and 5 the item will sell for 8 7 just over 7 just under 7 Bidrigging has all of these features EXCEPT It is a collusive agreement The bidriggers pay a smaller amount than without bidrigging Bidriggers need an auxiliary mechanism to allocate the good within the bidriggers Bid rigging is usually a legitimate and legal strategy for the buyerside The following is not associated with bidrigging bidriggers bidding their true value quotknockoutquot auctions bid rotations amnesty to the first conspirator willing to testify against fellow conspirators Bidrigging is more likely when auctions are larger auctions are infrequent auctions generate the same set of potential bidders the auctioneer is paid on commission rather than a fixed fee Bidrigging is more likely when auctions are larger auctions are frequent auctions generate different sets of potential bidders the auctioneer is paid on commission rather than a fixed fee Bidrigging is less likely in oral auctions secondprice auctions firstprice sealedbid auctions all are equally likely Bidrigging is more likely when auctions are larger auctions are infrequent auctions generate different sets of potential bidders the auctioneer is paid a fixed fee rather than on commission In common value auctions Bidder do not know the value of the object being sold Each bidder makes the same estimate of the value of the good All bidders know the estimates of the others The true value of the item differs across bidders In common value auctions Every bidder know the value of the object being sold Each bidder makes their own estimate of the value of the good All bidders know the estimates of the others The true value of the item differs across bidders In common value auctions Every bidder know the value of the object being sold Each bidder makes the same estimate of the value of the good Bidders do not know the estimates of the others The true value of the item differs across bidders In common value auctions Every bidder know the value of the object being sold Each bidder makes the same estimate of the value of the good All bidders know the estimates of the others The true value of the item is common across bidders The winners curse is more often associated with oral auctions secondprice auctions firstprice sealed bid auctions common value auctions This factor contributes to the winner39s curse your estimate of the value of the object was the most optimistic your bid was not the highest there were not many other bidders you had to beat out you did not shade your bid enough This factor contributes to the winner39s curse your estimate of the value of the object was not the most optimistic your bid was the highest there were not many other bidders you had to beat out you did not shade your bid enough This factor contributes to the winner39s curse your estimate of the value of the object was not the most optimistic your bid was not the highest there were many other bidders that you beat out you did not shade your bid enough This factor contributes to the winner39s curse your estimate of the value of the object was not the most optimistic your bid was not the highest there were not many other bidders you had to beat out you shaded your bid a lot To attract more bidders and more aggressive bidders to your auction reveal all of the relevant information about the value of the object don39t allow bidders to know how others are bidding do not allow potential bidders to examine the object too closely do not hold oral auctions To attract more bidders and more aggressive bidders to your auction withhold relevant information about the value of the object allow bidders to know how others are bidding do not allow potential bidders to examine the object too closely do not hold oral auctions To attract more bidders and more aggressive bidders to your auction withhold relevant information about the value of the object don39t allow bidders to know how others are bidding allow potential bidders ample time to examine the object being sold do not hold oral auctions To attract more bidders and more aggressive bidders to your auction withhold relevant information about the value of the object don39t allow bidders to know how others are bidding do not allow potential bidders to examine the object too closely hold oral auctions
ADSRASLRAS model of the economy

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