Question

realtor handles a condominum with 100 units.Experience assume that if the rent for each unit is 10,000 per month, all of the units will be occupied.But 10 units will become vacant for each 1000 pesos increase in the monthly rate.What rate should be charge to maximize the total revenue from the condominum.

Answer 1

100 units x 10000 = 1 000 000 peso / month
increase of 1000 peso/month = decrease in 10 units occupied/month
price increases = 10%
occupation decrease = 10%
so if its 11000/month, occupation drops to 90 = 990 000 pesos
if its 12000, occupation falls to 80 = 960 000
if 13000, 70 occupied and 910 000 pesos

so the greastest profits come from 100% occupancy @ 10,000/month