Arthur D. answered 02/03/15
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the first contract can go to firm1, firm 2, firm 3, firm 4, or firm 5
the second can go to 1,2,3,4, or 5 also (one firm can be awarded multiple contracts)
the third can go to 1,2,3,4, or 5 also (same reasoning here)
5*5*5=125 ways
sometimes it helps to make a similar more simple problem and you can get the idea from that...
how many ways can 2 contracts be distributed among 3 firms ?
contracts are A and B, firms are 1, 2, and 3
firm 1 firm 2 firm 3
A B
A B
A B
B A
B A
B A
AB
AB
AB
9 ways
contract A can go to 1,2, or 3
contract B can go to 1,2, or 3
3*3=9 ways