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The manager of a 100-unit apartment complex knows from experience that all units will be occupied if the rent is \$400 per month. A market survey suggests that, on the average, one additional unit will remain vacant for each \$5 increase in rent. What rent should the manager charge to maximize revenue?

this is my work so far:
So i want maximize the revenue so I need an expression for the revenue.

revenue = (number of units rented) (rent per unit)

100 * \$400 = \$40 000

let increments be x:

The number of units rented would then be 100 - x and the rent per unit would be \$400 + \$5x. Hence the revenue would be

(100 - x)(\$400 + \$5x)

Then i took the derivative of that function above to maximize it and i got x=30.

then i plugged in 30 in the revenue function and i got 4900 dollars. i don't think that right because increasing the rent from 800 to 4900 is too much.

would equation would i substitute x=30 in then?

I'm sorry -- but I don't know how to figure this out algebraically -- but I made a chart showing the revenue for rents up to \$450. With 90 apartments occupied, the monthly revenue is \$40,500. At this point the revenue keeps increasing. However, at rents of \$500 and 80 units occupied, the total revenue is back at \$40,000.

• my answer #2 - ,

as my total rent, i got 850 dollars.

the man will increase the rent by a maxium of 50 dollars.

i plugged in 30 into the revenue function and i got 4900.

4900/100 is 49 dollars per unit.

i rounded 49 to 50.

I think you mean that the highest rent would be \$450 per unit (not \$850).

I think there's something wrong with your numbers. However, you've found the right answer. The maximum rent should be \$450 for 90 occupied apartments -- bringing in \$40,500 a month to the apartment complex.

• Answer should be - ,

You have the right values at x=30 but you have to multiple 30 times 5 which is 150 added to the original rent making the maximum revenue coming when you have 30 vacant rooms and have 70 rooms occupied
Hope this helps

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