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1)As the manager of a 60-unit motel you know that all units are occupied when you charge $100 a day per unit. Each occupied room costs $76 for service and maintenance a day. You have also observed that for every x dollars increase in the daily rate above $100, 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 $562 calculate optimal profit.
2) A firm is selling a product with a constant marginal cost of $40. The own price elasticity of demand for the product has been estimated to be -2.0. Calculate the profit-maximizing price that the firm should charge.
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