Figure 13-4A
-Figure 13-4A above shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D1, the profit
A) increases from 6 to 8 million units per year.
B) decreases from 8 to 6 million units per year.
C) stays the same.
D) increases from $2 to $3 per unit.
E) cannot be determined; demand curves do not show a relationship to profit.

Question

Figure 13-4A
-Figure 13-4A above shows that when the price for Red Baron frozen cheese pizzas moves from $8 to $6 per unit along the demand curve D1, the profit
A) increases from 6 to 8 million units per year. 
B) decreases from 8 to 6 million units per year. 
C) stays the same. 
D) increases from $2 to $3 per unit. 
E) cannot be determined; demand curves do not show a relationship to profit.

Quizplus · Accepted Answer

Demand curves show the relationship between price and quantity demanded, not profit. Profit depends on costs and revenues, which are not shown on a demand curve.

Figure 13-4A -Figure 13-4A Above Shows That When the Price for Red