Over a 9-month period, 54 competing units were absorbed. What is the absorption rate in units per month?
Correct Answer
B) 6 units per month
Absorption = 54 units/9 months = 6 units/month. Keep the stated numerator, denominator and units distinct. Common errors: multiplying by the months instead of dividing gives 486 units per month; reporting the total units instead of the monthly rate gives 54 units per month; dividing by 12 months instead of 9 gives 5 units per month.
Why This Is the Correct Answer
Option B is correct because the absorption rate equals total units absorbed divided by the observation period: 54 units / 9 months = 6 units per month. This expresses the pace at which competing units were absorbed during the 9-month period.
Why the Other Options Are Wrong
Option A: 5 units per month
Option A is wrong because 5 units per month comes from dividing by 12 months instead of the 9-month observation period (54 / 12 = 4.5, shown as 5). The correct calculation is 54 / 9 = 6 units per month.
Option C: 54 units per month
Option C is wrong because 54 units per month simply reports the total units absorbed as if it were a monthly rate. Those 54 units were absorbed over 9 months, so the rate is 54 / 9 = 6 units per month.
Option D: 486 units per month
Option D is wrong because 486 units per month comes from multiplying the units by the months (54 x 9 = 486) instead of dividing. The correct rate is 54 / 9 = 6 units per month.
Per month means divide by months
The word 'per' signals division: units per month equals units divided by months. Use the actual months observed, not a default of 12.
How to use: Use the 'per means divide' cue whenever a question asks for a rate per month.
Exam Tip
Use the observation period stated in the stem as the denominator. Check that the result is a smaller monthly figure, not the total or a multiplied number.
Common Mistakes to Avoid
- -Multiplying units by months instead of dividing
- -Reporting the total units as the monthly rate
- -Dividing by 12 months instead of the stated period
Concept Deep Dive
Analysis
This question tests a basic absorption rate calculation: total units absorbed divided by the number of months observed. Both figures are given, so the answer requires a single division. The distractors come from multiplying, skipping the division, or using the wrong number of months.
Background Knowledge
The absorption rate is the rate at which available properties are sold or leased in a specific market during a given period. It is usually expressed per month and is a key input for estimating months of supply, sellout periods and market balance.
Real-World Application
An appraiser analyzing a new townhome project finds that competing projects absorbed 54 units over the last nine months. The resulting 6 units per month helps the appraiser estimate how long the subject's remaining units may take to sell.
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