The manager of a large apartment complex knows from experience that 110 units will be occupied if the rent is 360 dollars per month. A market survey suggests that, on the average, one additional unit will remain vacant for each 10 dollar increase in rent. Similarly, one additional unit will be occupied for each 10 dollar decrease in rent. (a) If æ is the number of units rented, and p is the rent per unit in dollars, what is the price-demand equation (assuming it is linear)? p = (b) What is the monthly revenue function for the manager? (Hint: Revenue is the product of the price per item and the number of items.) R(x) = (c) How many apartment units should be rented to maximize the monthly revenue? apartment units
The manager of a large apartment complex knows from experience that 110 units will be occupied if the rent is 360 dollars per month. A market survey suggests that, on the average, one additional unit will remain vacant for each 10 dollar increase in rent. Similarly, one additional unit will be occupied for each 10 dollar decrease in rent. (a) If æ is the number of units rented, and p is the rent per unit in dollars, what is the price-demand equation (assuming it is linear)? p = (b) What is the monthly revenue function for the manager? (Hint: Revenue is the product of the price per item and the number of items.) R(x) = (c) How many apartment units should be rented to maximize the monthly revenue? apartment units
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter5: Probability: An Introduction To Modeling Uncertainty
Section: Chapter Questions
Problem 9P: Cooper Realty is a small real estate company located in Albany, New York, that specializes primarily...
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Question
Transcribed Image Text:The manager of a large apartment complex knows from experience that 110 units will be occupied if
the rent is 360 dollars per month. A market survey suggests that, on the average, one additional unit
will remain vacant for each 10 dollar increase in rent. Similarly, one additional unit will be occupied
for each 10 dollar decrease in rent.
(a) If æ is the number of units rented, and p is the rent per unit in dollars, what is the price-demand
equation (assuming it is linear)?
p =
(b) What is the monthly revenue function for the manager?
(Hint: Revenue is the product of the price per item and the number of items.)
R(x) =
(c) How many apartment units should be rented to maximize the monthly revenue?
apartment units
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