Question: You are bidding on a project to fix all the potholes on Westheimer Road in Houston. You estimate the cost of fixing the potholes is

You are bidding on a project to fix all the potholes on Westheimer Road in Houston. You estimate the cost of fixing the potholes is $4 million. Four competitors are going to bid against you. Each competitor’s bid is normally distributed, with a mean of $6 million and a standard deviation of 0.5 million. Considering bids of $4.5, $5, $5.5, and $6 million, which bid maximizes the expected profit?

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