> Demand has no direct relationship with profit. This is false. Profit = Revenue - Costs Revenue = Demand * Price Costs = Demand * Variable Costs + Fixed Cost

> Demand has no direct relationship with profit. This is false. Profit = Revenue - Costs Revenue = Demand * Price Costs = Demand * Variable Costs + Fixed Costs Thus, Profit = Demand * Price - Demand * Variable Costs - Fixed Costs As long as variable costs < price then profit goes down when demand goes down.