Suppose That at a Price of €30 Per Month, There

question 33

Multiple Choice

Suppose that at a price of €30 per month, there are 30,000 subscribers to cable television in Small Town. If Small Town Cablevision raises its price to €40 per month, the number of subscribers will fall to 20,000. At which of the following prices does Small Town Cablevision earn the greatest total revenue?

• A) €0 per month
• B) €30 per month
• C) €40 per month
• D) Either €30 or €40 per month because the price elasticity of demand is 1.0.

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