Assume you usually would like to live close to nerds in your town (!) B(N) = N², where N = number of households. The offer premium is b(N) = 8*N for non-nerds households. There are 12 households in each neighborhood. nerds & non-nerds premium bid curves are displayed as follows:

160 140 120 Chart Area 100 Bid premium 80 60 40 20 0 6 7 8 9 10 11 12 Number of nerds in the neighborhood -Bid(nerd) - Bin(non-nerd)