Asked by kimberly sinicropi on Mar 10, 2024

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Anna's Antiques expects to get two 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 Anna can only set one price,what price should she set?

A) ​$100
B) $70
C) Any price higher than $100
D) ​Any price lower than $70

High-value

Referring to items or services that possess great monetary, instrumental, or intrinsic worth.

Low-value

Pertains to items or assets that carry a lesser worth or significance, either monetarily or in terms of utility.

Set Price

The predetermined fixed amount at which a product or service is sold to consumers.

  • Gain insight into the probable revenue effects for auctioneers under diverse conditions.
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DK
Derek Kayode

Mar 10, 2024

Final Answer :
A
Explanation :
Setting the price at $100 maximizes revenue because there's a chance both bidders value the teacup at $100, ensuring a sale at the highest possible price without excluding any high-value bidders.