Find the minimum price at which she would sell rights


Portia has waited a long time for her ship to come in, and she has concluded that it will arrive today with probability 0.25. If it does come, she will receive $16. If it doesn't come in today, it never will and she will have zero wealth. She has a von Neumann-Morgenstern utility function equal to the square root of her total income. What is the minimum price at which she would sell the rights to her ship?

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Microeconomics: Find the minimum price at which she would sell rights
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