Good Will in Price Bidding Sometimes, a bidder on a work contract may bid lower than what would ...

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Good Will in Price Bidding 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...

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Good Will in Price Bidding 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.

Answered Same Day Jun 02, 2021

Dr. Smita · Accepted Answer

Goodwill in Price Bidding
Goodwill is defined as the value enjoyed by the firm as an asset over and above the assets that are tangible in nature. Goodwill is an intangible asset of the firm which is developed over the years and by providing quality service and product at reasonable price. 
If I were to bid for a contract, I would not bid at a price which is too low just for creating goodwill because of the following reasons:
1. Goodwill is not created by bidding a price too low for a contract.

Good Will in Price Bidding 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...

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