Question

(1 point) The manager of a large apartment complex knows from experience that 110 units will be occupied if the rent is 300 dollars per month. A market survey suggests that, on the average, one additional unit will remain vacant for each 2 dollar increase in rent. Similarly, one additional unit will be occupied for each 2 dollar decrease in rent. What rent should the manager charge to maximize revenue

Answer 1

Answer:

$270

Explanation:

If the rent is $300 then 110 units will be occupied. The manager of the apartment complex should set a price which will maximize the revenue. When the rent is increased by $2 then one additional unit will be left vacant. This will reduce the revenue of the apartment manager. The equation to find the best possible rent which maximizes the total revenue is:

Profit = 110 (p - 300)

P = 110p - 330

P = 270.

The rent for the apartment should be 270 so the total revenue will be maximized.