9514 1404 393
Answer:
$880
Step-by-step explanation:
If r is the rent charged, then the number of $40 increments of increase will be ...
(r -800)/40
and the number of occupied apartments will be ...
120 -5(r -800)/40
The gross income (g) will be the number of apartments times the rent charged, or ...
g = r×(120 -5(r -800)/40) = (1/8)r(1760 -r)
The equation describes a parabola with zeros at r=0 and r=1760. The vertex will be on the line of symmetry, halfway between those zeros. The maximum gross income will be had when the rent is 1760/2 = 880.
$880 should be charged for rent to maximize gross income.
