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Pondside Apartments is a 1,000-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $222,200. When occupancy dips to 80%, monthly operating
Pondside Apartments is a 1,000-unit apartment complex. When the apartments are 90% occupied, monthly operating costs total $222,200. When occupancy dips to 80%, monthly operating costs fall to $216,400. The owner of the apartment complex is worried because many of the apartment residents work at a nearby manufacturing plant that has just announced it will close in three months. The apartment owner fears that occupancy of her apartments will drop to 60% if residents lose their jobs and move away. Assuming the same relevant range, what can the owner expect her operating costs to be if occupancy falls to 60%? Let's begin by determining the formula that is used to calculate the variable cost (slope). = Variable cost (slope)
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