Question

a bakery is determining consumer demand for their speciality product decorated cakes. The chart below describes the supply and demand for cakes at various prices the bakery might charge. Using the data from the chart, write a paragraph discussing the relationship between supply and demand for the cakes. Why is it important for businesses like the bakery to have this type of information when producting or selling a product? Based on the information provided, what is the market price for the cakes and how many cakes will the bakery sell at the price?

Answer 1

The relationship between supply and demand is crucial for businesses. The market price for the cakes can be determined by finding the equilibrium point. The bakery will sell the quantity of cakes corresponding to the quantity demanded at the market price.

Step-by-step explanation:

The relationship between supply and demand is crucial for businesses like the bakery to understand when producing or selling a product. Supply refers to the amount of a product that producers are willing to provide at different prices, while demand represents the quantity of the product that consumers are willing to buy at various prices. When supply and demand intersect at a certain price, it creates an equilibrium point known as the market price. This is the price at which the bakery will sell its cakes and the quantity of cakes it will sell.

In order to determine the market price and quantity sold, we can examine the given data. The table shows the demand and supply for cheddar cheese. By plotting the data on a graph, we can find the equilibrium point, which represents the market price and quantity. In this case, the market price would be the price at which the quantity demanded and supplied are equal. The bakery will sell the quantity of cakes corresponding to the quantity demanded at the market price.