The University Bookstore at a prestigious private university buys mechanical pencils from a wholesaler. The wholesaler offers discounts for large orders according to the following price schedule:

Order Quantity Price per Unit

0 to 200 .........$4.00

201 to 2,000 ......$3.50

2,00l or more ......$3.25

The bookstore expects an annual demand of 2,500 units. It costs $10 to place an order, and the annual cost of holding a unit in stock is 30 percent of the unit’s price. Determine the best order quantity