You're enjoying a cup of Moondogs Coffee and trying to make sense of the data on this demand curve.

What does this demand curve indicate?

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This demand curve shows that people only love coffee so much -- if the price gets too high, they cut back and stop buying it.

This demand curve shows that you'd maximize profits if you charged $4.00 for a cup of coffee.

This demand curve shows that you'd maximize profits if you charged $1.00 for a cup of coffee