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A telephone company in a town has 500 subscribers on its list and collects fixed charges of Rs 300/- per subscriber per year. The company proposes to increase the annual subscription and it is believed that for every increase of Rs 1/- one subscriber will discontinue the service. Find what increase will bring maximum profit?

We should consider that the organization expands the yearly membership by \[\mathbf{Rs}\text{ }\mathbf{x}.\]

Along these lines, x is the quantity of supporters who end the administrations.

 

Absolute income, \[\mathbf{R}\left( \mathbf{x} \right)\text{ }=\text{ }\left( \mathbf{500}\text{ }\text{ }\mathbf{x} \right)\text{ }\left( \mathbf{300}\text{ }+\text{ }\mathbf{x} \right)\]

\[=\text{ }\mathbf{150000}\text{ }+\text{ }\mathbf{500x}\text{ }\text{ }\mathbf{300x}\text{ }\text{ }\mathbf{x2}\]

\[=\text{ }-\text{ }\mathbf{x2}\text{ }+\text{ }\mathbf{200x}\text{ }+\text{ }\mathbf{150000}\]

Separating the two sides w.r.t. x, we get R'(x) \[=\text{ }-\text{ }\mathbf{2x}\text{ }+\text{ }\mathbf{200}\]

For LOCAL maxima and nearby minima, R'(x) = 0

 

\[-\text{ }\mathbf{2x}\text{ }+\text{ }\mathbf{200}\text{ }=\text{ }\mathbf{0}\Rightarrow \mathbf{x}\text{ }=\text{ }\mathbf{100}\]

\[\mathbf{R}”\left( \mathbf{x} \right)\text{ }=\text{ }-\text{ }\mathbf{2}\text{ }<\text{ }\mathbf{0}\text{ }\mathbf{Maxima}\]

Along these lines, R(x) is most extreme at \[\mathbf{x}\text{ }=\text{ }\mathbf{100}\]

Along these lines, to get most extreme benefit, the organization should expand its yearly membership by \[\mathbf{Rs}\text{ }\mathbf{100}.\]