Question

5 people can claim joint ownership of an item and intend to divide it by the method of sealed bids. The winner offers a bid of $8,000, how much will that bidder need to put into a kitty for the other bidders to be compensated?

Answer 1

Explanation:

there is one item and it cannot be split.

the winning bid was $8,000.

that means the fair share for each one of the 5 participants is

8000/5 = $1,600

the winner is getting one item with a value greater than his fair share.

so, he has to pay the difference into the kitty :

8000 - 1600 = $6,400