Which of the following auction examples has a common value information structure?
A. An auction of a famous painting.
B. Three firms bid for an oil lease.
C. A college in need of money decides to name a building on campus after the person willing to pay the most for the privilege.
D. An auction of a famous painting and a college in need of money decides to name a building on campus after the person willing to pay the most for the privilege.
Answer: B
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If a monopolist's price is $50 at the output where marginal revenue equals marginal cost and average total cost is $43, then the incremental profit from the last unit sold is $7
Indicate whether the statement is true or false
Marginal cost for a firm can be derived from its demand curve.
Answer the following statement true (T) or false (F)
The higher the beta,
A) the smaller the diversifiable risk. B) the smaller the nondiversifiable risk. C) the larger the diversifiable risk. D) the larger the nondiversifiable risk.
One of the limitation of Five Forces is that they
a. Reduce producer surplus b. For one firm to increase profit, the profit of another participant must decrease c. Does not provide a firm with sustainable competitive advantage d. Both b and c