Given:
Amount Barry bids = $500
Allen's bid = $350
Since Barry's bid is higher he gets the TV and has to compensate Allen with cash.
Let's determine how much Barry will have to pay Allen in order to kep the division fair.
Let's find the average of their bids:
[tex]\frac{500+350}{2}=\frac{850}{2}=425[/tex]We can see their average bid is $425.
Thus, to find the amount of cash Barry will have to pay to Allen, we have:
[tex]\frac{425}{2}=212.50[/tex]Therefore, to keep the division fair, Barry will have to pay $212.50 to Allen.
The easiest method to calculate this is:
[tex]\begin{gathered} \frac{500+350}{2}\ast\frac{1}{2} \\ \\ =\frac{850}{2}\ast\frac{1}{2} \\ \\ =\frac{850}{2\ast2} \\ \\ =\frac{850}{4} \\ \\ =212.50 \end{gathered}[/tex]ANSWER:
$212.50
