QUESTION 7

Many small software companies, such as LaserSoft Imaging Inc., a company that produces scanning software, sell their software exclusively (or almost exclusively) via the internet. This company has hired you to help determine the correct price to charge in order to maximize revenues. Using a combination of historical and survey data, your best estimate of yearly demand for the software is

Q = 80,000 - 1,000P

where Q is the quantity of copies sold per year and P is the price per copy. If the firm's goal is tomaximize revenues,what price do you recommend for the software, and what revenue should the company expect to earn?

A) The price should be $40, and the revenues will be $800,000.

B) The price should be $40, and the revenues will be $1,600,000.

C) The price should be $80, and the revenues will be $1,600,000.

D) Information on costs is needed to make a recommendation.

E) The price should be $80, and the revenues will be $3,600,000.