CASE STUDY CHALLENGE
Optimization: Magazine Revenue Analysis
A magazine company circulates its magazine on a monthly basis in a city. It has 10,000 readers on its list and collects fixed charges of ₹ 4,000 per reader annually.
The company proposes to increase the annual subscription, but on the basis of a survey result, it predicted that for every increase of ₹ 5, ten readers will discontinue the service of this magazine company.
Based on the above information, answer the following questions:
Answer the following:
| (i) | Let the company increase ₹ x, then find the function R(x) representing the earnings of the company. | [1] |
| (ii) | Find d/dx (R(x)). | [1] |
| (iii) | (a) What subscription increase will bring maximum earnings for the company?
— OR —
(b) What will be the maximum value of R(x)? |
[2] |