In a competitive market, what does the demand curve show?

The demand curve in a competitive market represents the marginal benefit received by consumers at each quantity of a good or service. It illustrates the maximum price that consumers are willing to pay for each additional unit of the good, reflecting their preferences and willingness to pay as they derive utility from consumption.

As consumers are faced with different quantities of a product, the demand curve typically slopes downwards, indicating that, as the price decreases, consumers are willing to buy more of the good because the marginal benefit they receive from consuming additional units is higher relative to the price they must pay. This relationship demonstrates the principle of diminishing marginal utility, where each additional unit consumed yields less additional satisfaction compared to previous units.

In this context, the other options do not accurately describe what the demand curve represents. The demand curve does not primarily represent price and quantity, which are simply the axes of the graph rather than the relationship itself. It also does not illustrate marginal cost or total surplus, as these concepts relate to supply and efficiency in the market rather than consumer demand. Lastly, while the cost of production is essential for determining supply, it does not influence the demand curve directly; rather, the demand curve focuses solely on consumer preferences and the benefits they derive from consumption.