Firm Z Is One of the 4 Bidders,each with a Value

Multiple Choice

Firm Z is one of the 4 bidders,each with a value independently drawn from the range $20,000 to $60,000.All values are equally likely.Let us consider bi and vi as the holding value and bidding value of the bidder 'i' respectively.Therefore,in a sealed-bid auction,Firm Z's equilibrium bidding strategy will be_____.

A) b_i = (0.25) (40,000) + 0.75v_i
B) b_i = (0.5) (20,000) + 0.5v_i
C) b_i = (0.5) (40,000) + 0.5v_i
D) b_i = (0.25) (20,000) + 0.75v_i
E) b_i = (0.75) (20,000) + 0.25v_i