Acompany can sell 2000 magazine subscriptions at $40 each. for each $5 increase in the price, it will sell 200 fewer subscriptions. what subscription price will provide the maximum revenue for the company? $55 $40 $45 $50

ANSWER

The subscription price of $45 provides the maximum revenue for the company

EXPLANATION

When the price is $, the company sells quantities.

The total revenue accrued

When the price increases to $ the quantity sold will decrease by 200 magazines which is

The total revenue accrued

dollars

When the price increases to $ the quantity sold will decrease by 200 magazines again which is

The total revenue accrued

dollars

When the price increases to $ the quantity sold will decrease by 200 magazines which is

The total revenue accrued

dollars

Hence a subscription price of $45 provides the maximum revenue for the company.

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