The relationship between a firm's price and sales quantity is described by the ______ for its product.
A) Demand curve
B) Supply curve
C) Marginal cost curve
D) Average cost curve

Question

Quizplus · Accepted Answer

The demand curve shows the relationship between the price of a product and the quantity of the product that consumers are willing and able to buy. As the price of a product increases, the quantity demanded generally decreases, and vice versa. Therefore, the demand curve is essential for understanding a firm's pricing strategy and the potential sales volume of a product. The supply curve shows the relationship between the price of a product and the quantity that firms are willing and able to produce and supply to the market. Marginal cost and average cost curves are related to a firm's cost structure and not directly related to the pricing and sales quantities of a product.

The Relationship Between a Firm's Price and Sales Quantity Is