Good Will in Price Bidding, assignment help

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Economics

Description

Sometimes, a bidder on a work contract may bid lower than what would maximize his/her profit from the contract and the reason for that is to create goodwill (to increase expected future business from the buyer). How would you value the goodwill that is obtained in this way?

Guided Response:
Think about an example that pertains to you. If there is expected goodwill would you be prepared to bid lower to get a contract? Explain your reasons. In 300 words or more, please, provide your response to the above discussion question. Respond substantively to at least two of your classmates’ postings. Substantive responses use theory, research, and experience or examples to support ideas and further the class knowledge on the discussion topic.

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Explanation & Answer

Running Head: GOOD WILL IN PRICE BIDDING

Good Will in Price Bidding
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Introduction

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Running Head: GOOD WILL IN PRICE BIDDING

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A bidder on a work contract may bid lower that would maximize his/her profit. This does
not mean that the bidder sets the price lower than the price it cost them but rather means that the
bidder doesn’t get as much credit as they would have.
Overview
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Anonymous
Excellent resource! Really helped me get the gist of things.

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