14. Akali is the only nurse in Ionia. Ionia has 21 ninja households distributed one-tenth of a mile along the main street. Each ninja household goes to see Akali for her services at most one time per week. There are additional dangers on the street going there-and back again which are equal to $0.5 for every tenth of the mile. The reservation price of each ninja to pay for Akali services is $10. To serve each ninja, Akali incurs $2 costs. What the maximum price should Akali charge if she wants to serve the whole Ionia? How much would she earn?

14. Akali is the only nurse in Ionia. Ionia has 21 ninja households distributed one-tenth of a mile along the main street. Each ninja household goes to see Akali for her services at most one time per week. There are additional dangers on the street going there-and back again which are equal to $0.5 for every tenth of the mile. The reservation price of each ninja to pay for Akali services is $10. To serve each ninja, Akali incurs $2 costs. What the maximum price should Akali charge if she wants to serve the whole Ionia? How much would she earn?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.7P

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