17. A seller knows that there are two bidders for the object he is selling. He believes that with probability 1'2, one has a buyer value of $5 and the other has a buyer value of $12 and, with probability 1/ 2, one has a buyer value of $10 and the other has a buyer value of $30. He knows that bidders will want to buy the object so long as they can get it for their buyer value or less. He sells it in an English auction with a reserve price which he must set before the auction starts. To maximize his expected profits, he should set the reserve price at a. $30. b. $5. c. $12. (1. $10. e. $20. ANS: A 18. A seller decides to sell an object by means of a sealed-bid second-price auction without a reservation price. There are two bidders. The seller believes that for each of the two bidders there is a probability of \"2 that the bidder's value for the object is $600 and a probability of 1)" 2 that the bidder 's value is $200. The seller believes that these probabilities are independent between bidders. If the bidders bid rationally, what is the seller's expected revenue from the auction? a. $600 13. $400 C. $300 d. $280 e. $360 ANS: C