Based on the concepts of Fatigue function and reservation price, the optimal location for highway service areas is discussed respectively in the cases of monopoly and duopoly. Following conclusions have been derived: 1. Firms set the highway rest area location criteria: City-ended to rest area and rest area away from the longest distance between stations set up position is not greater than the driver fatigue numbness distance. 2. Under monopoly, if the highway has not exceeded enough length, only one service area will be set up by the firm, and the location of the service area will be at the midpoint of the highway. In the case when the highway has exceeded enough length, two service areas will be set up by the firm at the equal distance to the city on each end of the highway, and the distance is shorter than one third of the length of highway. 3. Under duopoly, when both firms set up service areas, the location of each service area will be at a point where the distance to the city on either end is about one third of the length of the highway. Furthermore, the leading firm, compared with the following firm, will set up the service area at a more distant location to the city at one end of the highway.