An internet service provider in a town has 500 subscribers and charging ₹300 per month from each subscriber. He proposes to increase the monthly charges and it is believed from past experience that for every increase of ₹1, one subscriber will discontinue the service. |
The number of subscribers for which the maximum revenue is earned is |
100 200 300 400 |
400 |
Consider that company increases the annual subscription by Rs x R(x)=(500−x)(300+x) Revenue R(x) = -x2 + 200x + 150000 Differentiating R'(x) = -2x + 200, put R'(x) = 0 ⇒ -2x + 200 = 0 ⇒ x = 100 R″(x) = -2 < 0 R(x) is maximum at x = 100 Number of subscriber for maximum revenue is 500 - 100 = 400. |