Question

You are the manager of an apartment complex with 50 units. When you set rent at $800/month, all apartments are rented. As you increase rent by $25/month, one fewer apartment is rented. Maintenance costs run $50/month for each occupied unit. What is the rent (in dollars) that maximizes the total amount of profit

Answer 1

Answer:

The rent (in dollars) that maximizes the total amount of profit is $1,050.

Explanation:

Note: See the attached excel file for the Calculation of the Rent (in dollars) That Maximizes the Total Amount of Profit.

The rent (in dollars) that maximizes the total amount of profit is the rent per unit that has the highest profit.

From the attached excel file, the highest profit is $40,000 (in bold red color) and this occurs when the rent per unit is $1,050 (in bold red color).

Therefore, the rent (in dollars) that maximizes the total amount of profit is $1,050.