Why is it important for marketers to see and understand demand curves?

• A. Because demand curves indicate the supply of goods available in the market.
• B. Because demand curves determine the equilibrium wage rate in labor markets.
• C. Because demand curves help marketers predict how changes in price will affect the quantity demanded of a product.
• D. Because demand curves show the total costs of production at different output levels.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand what a demand curve represents. A demand curve shows the relationship between the price of a good and the quantity demanded by consumers at each price level.
2. Step 2: Recognize that marketers use demand curves to predict consumer behavior. By analyzing the demand curve, marketers can estimate how changes in price will influence the quantity of a product that consumers are willing to buy.
3. Step 3: Note that demand curves do not indicate supply or production costs. Instead, they focus solely on consumer demand, which is crucial for setting prices strategically.
4. Step 4: Understand that knowing the demand curve helps marketers make informed decisions about pricing, promotions, and inventory management to maximize sales and profits.
5. Step 5: Conclude that the importance of demand curves lies in their ability to help marketers anticipate market reactions to price changes, which is essential for effective marketing and business planning.