The demand curve facing a firm shows the
A)maximum price the firm can charge and still sell any given amount of output
B)minimum price the firm can charge and still sell any given amount of output
C)minimum price at which the firm will demand any given quantity of output
D)maximum price at which the firm will demand any given quantity of output
E)minimum quantity of output the firm can sell at any given price

Question

Quizplus · Accepted Answer

The demand curve facing a firm shows the maximum price the firm can charge and still sell any given amount of output. This is because as the price increases, the quantity demanded decreases and vice versa. Therefore, the firm must lower the price to sell more output and raise the price to sell less output. The demand curve helps the firm determine the optimal price to charge for each level of output.

The Demand Curve Facing a Firm Shows the