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Question: as the manager of a 60unit motel you know that...

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As the manager of a 60-unit motel you know that all units are occupied when you charge $80 a day per unit. Each occupied room costs $56 for service and maintenance a day. You have also observed that for every x dollars increase in the daily rate above $80, there are 2x units vacant. Determine the daily price that you should charge in order to maximize profit. Calculate the number of occupied units. Assuming that fixed cost is $258 calculate optimal profit.

What price would you charge if you want to maximize total revenue instead? What will be the resulting profit in that case?

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