The Auction That Starts High
Written by Studio AM.
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Some auctions begin with a low price and invite people to bid upward. A descending-price auction runs in the opposite direction. The auctioneer announces a high price, then lowers it step by step until someone accepts. The first person to accept usually wins at that price.
Each bidder faces a tradeoff. Waiting may bring a better price, but another bidder may act first. Accepting early protects the chance to win, yet it may mean paying more than necessary. No bidder needs to call out a series of offers; the falling price itself acts like a clock.
This format is sometimes used when goods must be sold quickly, such as batches of flowers or produce. Its speed does not make the decision simple. A bidder must judge both the item's value and the likely patience of other bidders. The winning moment reflects a balance between price and risk.
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Questions
Choose an answer. The explanation appears after you answer.
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Question 1 of 4
What is the main idea of the passage?
The answer is C: A descending-price auction rewards the first acceptance while forcing bidders to balance a lower price against the risk of losing.
The mechanism and its central tradeoff are developed in every paragraph.
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Question 2 of 4
Why might a bidder accept before the price falls further?
The answer is D: Another person could accept first and win the item.
The text says waiting can improve the price but creates the risk that another bidder acts first.
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Question 3 of 4
What does “tradeoff” mean here?
The answer is A: a choice in which gaining one benefit means accepting another cost
Waiting offers a possible lower price but reduces the chance of winning, illustrating a tradeoff.
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Question 4 of 4
How does the announced price move during this auction?
The answer is B: It begins high and falls step by step.
The opening paragraph directly describes a high starting price that the auctioneer lowers.
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