Scarletwine
New Yorker
When do we get to read your thesis?
Souly said:An apartment building has 200 apartments. If the rent is $300 per month, the rental agent is able to rent all 200 apartments. However, the owner knows from past experience that, for each additional $25 increase in monthly rent, 2 additional apartments will become vacant. The rental agent receives a bonus when the building is fully ocupied and is urging that the rent remain at $300 per month.
How much would advive the owner to charge for rent?
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Scarletwine said:When do we get to read your thesis?
melon said:
So, in short: take your schoolwork seriously.
Melon
melon said:
In the best interest of the rental agent, he would certainly advise $300 a month for rent, because he's looking for that bonus.
In the best interest of the owner, he should charge $1400 a month and fill 112 apartments with maximized revenue of $156,800. Anything more or less than that, he will make less money.
300*200=60,000
1350*116=156,600
1375*114=156,750
1400*112=156,800 <--
1425*110=156,750
1450*108=156,600
Melon
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