We recently added the S Network to our services. Currently, 852 of our basic service subscribers purchase this service at our current price of $10.50 per month.

As you know, our current contributions from S are not as high as we expected. Please to evaluate our current price to see if we might be able to raise or lower it to improve the contributions of S to our bottom line.

In an earlier study of the feasibility of adding S, the marketing department obtained the attached data on the demand and costs for this channel in our Region 1 service area.

Please use these data (Table 1) to provide your recommendation.

 (1) an estimate of our profit-maximizing price

 (2) An estimate of how much our monthly profit will increase if we adjust price to your recommended level.

Number of Subscribers (Thousands)	Cost of License Fees (Thousands)	Divisional Sales, General, and Administrative Costs (Thousands)
1.493	$8.21	$1.20
1.5	$8.25	$1.20
0.938	$5.16	$1.20
1.224	$6.73	$1.20
1.105	$6.08	$1.20
0.952	$5.23	$1.20
1.205	$6.63	$1.20
1.212	$6.66	$1.20
1.234	$6.79	$1.20
1.104	$6.07	$1.20
0.842	$4.63	$1.20
0.881	$4.85	$1.20
0.872	$4.80	$1.20
0.981	$5.40	$1.20
0.664	$3.65	$1.20
0.848	$4.67	$1.20
0.488	$2.68	$1.20
0.227	$1.25	$1.20
0.249	$1.37	$1.20
0.503	$2.76	$1.20
0.305	$1.68	$1.20