u 1 . Individual Problems 21-1 Men real estate agents sell their own, rather than clients', houses, they leave the housa on the market for a longer me (10 days longer on average) and wind up with better prim. Suppose that real estate agents earn a commission equal to 3% of the sale value of each house that they help sell. Suppose a real estate agent has an offer on a house of $200,000. The agent can get a 4% higher o'er with morei'ort and by leaving the house on the market For a few more week. if the agent sells the house now, he will earn a commission of':] . By keeping the house on the market and expending more effort to sell the house, the agent can earn a commission of E} Thus, the agent gains El for the extra effort and time of keeping the house on the market. Suppose a real estate agent has an offer on a house that he owns. 111a agent has a current offer of $200,000, but can get a 4% higher offer with more effort and by leaving the house on the market for a few more weeks. Assume that all of the commission is paid back to the agent, since he will act as the agent for the sale. If the agent waits to sell the house. he gains 1: more than selling the house now. Since this amount is gain by waiting to sell a house he does not own (as In the rst part of the problem), expend more effort to sell a house that he owns, 7 than what he would the agent is V llkeiy to keep a house on the market and as opposed to one that he dug not own