Suppose you run an apartment rental company in a suburb area, call it Armazy, of country Zanzy with x units of one and two bedroom apartments combined. The population size and the income level in Armazy area are good enough for the market for apartment rental. You are the only player in the area, and the closest competitor is about 100 miles away. Your marginal cost of running the rental company is $c.
a. Describing your pricing strategy that maximizes your profit. How does the price elasticity of demand for apartment affect your pricing strategy? What factors that affect the price elasticity of demand for your apartment units? For each of the questions above, explain your answers as detailed as possible, using the equations and framework explained in class and textbook.
b. Realizing that you enjoy sizable profits from the business, some firms decide to build new apartment complexes in the area. Suppose now that there are three players in the market and the apartment units offered are relatively indistinguishable from each other (for instance, they offer almost the same amenities, and etc.). Describing your pricing strategy that maximizes your profit. How does the price elasticity of demand for apartment affect your pricing strategy? What factors that affect the price elasticity of demand for your apartment units? For each of the questions above, explain your answers as detailed as possible, using the equations and framework explained in class and textbook.
c. Suppose Armazy is now one of the fastest growing suburbs in Zanzy. A number of real estate developers are building new residential housing complexes and offering a competitive price, whether renting or buying. Describing your pricing strategy that maximizes your profit. How do the new residential housings affect the price elasticity of demand for your apartment and your pricing strategy? For each of the questions above, explain your answers as detailed as possible, using the equations and framework explained in class and textbook.
d. Suppose that Armazy is well-known for its natural beauty and it attracts a lot of visitors/tourists during the summer time. Also consider that there is a big training center, not far from your apartment complex, for a mega retail company, headquartered in the city of Azuba.The trainings are usually run in the summer. Describing your pricing strategy that maximizes your profit. How do the new residential housings affect the price elasticity of demand for your apartment and your pricing strategy? For each of the questions above, explain your answers as detailed as possible, using the equations and framework explained in class and textbook
a. Describing your pricing strategy that maximizes your profit. How does the price elasticity of demand for apartment affect your pricing strategy? What factors that affect the price elasticity of demand for your apartment units? For each of the questions above, explain your answers as detailed as possible, using the equations and framework explained in class and textbook.
b. Realizing that you enjoy sizable profits from the business, some firms decide to build new apartment complexes in the area. Suppose now that there are three players in the market and the apartment units offered are relatively indistinguishable from each other (for instance, they offer almost the same amenities, and etc.). Describing your pricing strategy that maximizes your profit. How does the price elasticity of demand for apartment affect your pricing strategy? What factors that affect the price elasticity of demand for your apartment units? For each of the questions above, explain your answers as detailed as possible, using the equations and framework explained in class and textbook.
c. Suppose Armazy is now one of the fastest growing suburbs in Zanzy. A number of real estate developers are building new residential housing complexes and offering a competitive price, whether renting or buying. Describing your pricing strategy that maximizes your profit. How do the new residential housings affect the price elasticity of demand for your apartment and your pricing strategy? For each of the questions above, explain your answers as detailed as possible, using the equations and framework explained in class and textbook.
d. Suppose that Armazy is well-known for its natural beauty and it attracts a lot of visitors/tourists during the summer time. Also consider that there is a big training center, not far from your apartment complex, for a mega retail company, headquartered in the city of Azuba.The trainings are usually run in the summer. Describing your pricing strategy that maximizes your profit. How do the new residential housings affect the price elasticity of demand for your apartment and your pricing strategy? For each of the questions above, explain your answers as detailed as possible, using the equations and framework explained in class and textbook
