[simulate]

> 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.

[stormbrew]

I don't disagree with this post, except on semantics.