Example 2: Apartment Buildings

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# Example 2: Apartment Buildings - PowerPoint PPT Presentation

Example 2: Apartment Buildings 10 apartment buildings in a college town, each contains 100 rental units. Have data on the number of apartments rented, the rental price, the amount spent on advertising, the distance to campus. Example 2: Apartment Buildings

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Example 2: Apartment Buildings

10 apartment buildings in a college town, each contains 100 rental units.

Have data on the number of apartments rented, the rental price, the amount spent on advertising, the distance to campus.

Example 2: Apartment Buildings
• What is the estimated demand function for the rental units?
• If the owner raised rents at one complex by \$100, what would you expect to happen to the number of units rented?
• If the owner raised rents at an average apartment building, what would happen to the revenues?
• What inferences should be drawn from this analysis?