In a small town, the cable TV service has 30,000 subscribers when the monthly fee is Rs 30. If the company increases the monthly charge to Rs 40, the subscriber count drops to 20,000. At which monthly price does the cable provider generate the highest total revenue?
Explanation
Total revenue is calculated by multiplying price by quantity. At Rs 30, revenue is 30 × 30,000 = Rs 900,000. At Rs 40, revenue is 40 × 20,000 = Rs 800,000. Therefore, the highest total revenue is earned at Rs 30 per month.