A buyer has an incumbent supplier who suppliers 100,000 units at $2 per unit. He is running an auction in an attempt to decrease the price. Switching costs to a new

supplier are estimated at $50,000. The buyer should set a reserve price not lower than _______

Suppose the auction was conducted and the lowest

price was $1 per unit. Shipping cost is 10% and the cost to validate a new supplier is $20,000. The TO for the supplier who bid $1 is ________

the buyer switch from the incumbent to the supplier who bid $1 (assume that there are no other considerations besides the ones mentioned above)______

(fill in elther yes" or "no").