The Hotel Bellville has 400 rooms. Currently the hotel is filled . The daily rental is $ 250 per room.

Question

For every $ 14 increase in rent the demand for rooms decreases by 5 rooms.
Let x = the number of $ 14 increases that can be made.
What should x be so as to maximize the revenue of the hotel ?

I don't really understand how to start this problem...Am I supposed to use the point-slope formula? And if so, how do I know which is the independent or dependent variable?

Answer 1

revenue = rate * #rooms
= (250+14x)(400-5x)

this will be a parabola, where max revenue is at the vertex.

Answer 2

thanks!