Question

The manager of a large apartment complex knows from experience that 100 units will be occupied if the rent is 400 dollars per month. A market survey suggests that, on the average, one additional unit will remain vacant for each 4 dollar increase in rent. Similarly, one additional unit will be occupied for each 4 dollar decrease in rent. What rent should the manager charge to maximize revenue

Answer 1

Answer:

For a rent of $400.00 = 100 units will be occupied;

For a rent of $404.00 = 100 unit will be occupied;

For a rent of $396.00 = 101 units will be occupied.

Explanation:

For a rent of $400.00 = 100 units will be occupied

For a rent of $404.00 = 100 unit will be occupied since 1 additional unit will be vacant.

For a rent of $396.00 = 101 units will be occupied.

∴ The most adequate rent to be charged by the manger to maximize revenue is $396.00 since an additional unit will be occupied.