Suppose That at a Price of R300 Per Month, There

Multiple Choice

Suppose that at a price of R300 per month, there are 300 000 subscribers to a television service in Small Town. If Small Town Television raises its price to R400 per month, the number of subscribers will fall to 200 000. At which of the following prices does Small Town Television earn the greatest total revenue?

A) R0 per month
B) R300 per month
C) R400 per month
D) Either R300 or R400 per month because the price elasticity of demand is 1.0.