Some venture capitalists learned in economics that total revenue is the

total receipts a seller receives from selling goods to buyers, and that it

can be written as P x Q, which is the price of goods times the quantity of

goods sold. They hold the plans to the next "hot" technology gizmo that

everyone will want to buy. In pricing the item, they made some

assumptions: 1) For small quantities purchased, set the price low to

invite people to get familiar with the product. 2) For large quantities

purchased, set the price low as preferential treatment for your best

customers. 3) Limit the number that can be purchased to a maximum of

1000 units. 4) An analyst recommends that the selling price for 500 units

be $2500, or you will price yourself out of the market. They have hired

you as a consultant to make a recommendation about what the

maximum revenue will be for the company under this business plan.

Even though the units may be sold in different quantities, the central

question to ask is, "If all the purchases involved the same exact number of items,

what would be the revenue for the company under that condition, and when would the

revenue be as big as possible?" This would provide a ceiling figure to report

back to the investors.