Demand and Supply of Jelly-Filled Doughnuts

Demand and Supply for Jelly-Filled Doughnuts

• As prices decrease, the quantity demanded increases. Consumers are more likely to purchase more at lower prices.
• As prices increase, the quantity demanded decreases. Higher prices typically deter consumers from buying as many products.
• As prices decrease, the quantity supplied also decreases. Producers are less inclined to sell products when price points are lower.
• As prices increase, the quantity supplied increases. Higher prices encourage producers to supply more products to the market.
• The equilibrium price is where quantity demanded equals quantity supplied, balancing consumer desire and producer willingness.

Surplus and Shortage Situations

• If the price of a doughnut is $0.50, there will be a surplus, as the price exceeds the quantity consumers are willing to buy.
• If the price of a doughnut is $0.20, there will be a shortage, as the lower price increases demand beyond what producers are willing to supply.

Changes in Demand

• An increase in the number of consumers will lead to an increase in demand for jelly-filled doughnuts. More consumers typically mean more overall demand.
• A decrease in consumers' income will result in a decrease in the demand for jelly-filled doughnuts, as consumers may have less discretionary income to spend on non-essential goods.