This past year, Used Imported Autos sold very few cars and lost over$500,000. As a consequence, its.

This past year, Used Imported Autos sold very few cars and lost over$500,000. As a consequence, its manager is contemplating two strategies toincrease its sales volume. The low-cost strategy involves changing the dealer-ship name to Quality Used Imported Autos to signal to customers that thecompany sells high-quality cars. The high-cost strategy involves issuing a10-point auto inspection on all used cars on the lot and offering consumers a30-day warranty on every used car sold. Which of these two strategies do youthink would have the greatest impact on sales volume? Explain.Pelican Point Financial Group’s clientele consists of two types of investors.The first type of investor makes many transactions in a given year and has anet worth of over $1 million. These investors seek unlimited access to invest-ment consultants and are willing to pay up to $10,000 annually for no fee-based transactions, or alternatively, $25 per trade. The other type of investoralso has a net worth of over $1 million but makes few transactions each yearand therefore is willing to pay $100 per trade. As the manager of Pelican PointFinancial Group, you are unable to determine whether any given individual isa high- or low-volume transaction investor. Design a self-selection mecha-nism that permits you to identify each type of investor.CPT Inc. is a local manufacturer of conveyor systems. Last year, CPT soldover $2 million worth of conveyor systems that netted the company $100,000in profits. Raw materials and labor are CPT’s biggest expenses. Spending onstructural steel alone amounted to over $500,000, or 25 percent of total sales.In an effort to reduce costs, CPT now uses an online procurement procedurethat is best described as a first-price, sealed-bid auction. The bidders in theseThe Economics of Information20.21.22.23.471auctions utilize the steel for a wide variety of purposes, ranging from art toskyscrapers. This suggests that bidders value the steel independently, althoughit is perceived that bidder valuations are evenly distributed between $5,000and $20,000. You are the purchasing manager at CPT and are bidding on threetons of 6" hot-rolled channel steel against five other bidders. Your companyvalues the three tons of channel steel at $12,000. What is your optimal bid?