A real estate office handles a 60-unit apartment complex. When the rent is $530 per month, all units are occupied. For each $40 increase in rent

aflacatn

aflacatn

Answered question

2021-09-10

A real estate office handles a 60-unit apartment complex. When the rent is $530 per month, all units are occupied. For each $40 increase in rent, however, an average of one unit becomes vacant. Each occupied unit requires an average of $65 per month for service and repairs. What rent should be charged to obtain a maximum profit?

Answer & Explanation

Anonym

Anonym

Skilled2021-09-11Added 108 answers

Let x be the number of the vacant apartment and Z(x) be the profit function.
The number of units occupied =60x
Cost=65(60x)
Rent is $530 when all units are occupied and for $40 increases in rent one unit becomes vacant. rent=530+40x
Profit  =(  number of units occupied  )(rent)(cost)
Z(x)=(60x)(530+40x)65(60x)=31800+2400x530x40x23900+65x
=27900+1935x40x2

Z(x)=27900+1935x40x2
Z(x)=193580x, Z(x)=0
193580x=0
80x=1935
x24

Z(x)=193580x
Z(x)=80<0
The maximum profit obtain at x=24
The rent to be charged to maximize the profit is,
Rent  =530+40x=530+40×24=$1490

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