1. The previous record of a contractor's bidding encounters against three competitors is:

Job Contractor's Cost Bid Price of Competitors ($ millions)

No. Estimate ($ millions) A B C

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1 0.85 1.05 1.1 0.95 2 1.6 2.1 1.8 1.6 3 0.7 0.9 4 2.0 2.4 2.2 Using Friedman's and Gates's models, determine the markup needed to optimize expected profit in the following cases, and comment on the results:

a. Bidding against A, B,and C in a new job with estimated total cost of $10,000.

b. Bidding against A, E, and C in a new job with estimated total cost of $5,000,000.

c. Comment on the impact of project size in

(a) and

(b) on the estimated optimum markup.

d. Bidding against six typical competitors with behavior close to that of competitor B.