Understanding Supply and Demand: Graphing Bread Prices

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School

Kealakehe High School *

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Course

101

Subject

Economics

Date

Jun 8, 2024

Type

pdf

Pages

6

Uploaded by canecracker656

Section 1: Creating a Supply and Demand Graph Complete items 1 through 3. Use the supply and demand schedules to build a graph using the graphing area below. Then answer the following questions. Feel free to return to the previous activities in the lesson if you need to review major concepts. 1. Artisan Bakery sells loaves of bread that it bakes fresh every day. Use the supply schedule to graph each point of the supply curve. Connect each point with a line to build a supply curve. Price of bread per loaf Quantity supplied $4.50 40 $5.00 50 $5.50 60 $6.00 75 $6.50 85 In which direction does the supply curve head? How does this show the law of supply? (1 point) The supply curve slopes upward, showing that as prices rise, sellers are willing to sell more. It demonstrates the law of supply by showing how as the price of a good increases, the amount supplied increases too.
2. Use the demand schedule to graph each point of the demand curve. Connect each point with a line to build a demand curve. Price of bread per loaf Quantity demanded $4.50 95 $5.00 75 $5.50 60 $6.00 50 $6.50 45 In which direction does the demand curve head? How does this show the law of demand? (2 points) The demand curve slopes downward, showing that as prices fall, buyers want to buy more. The demand curve is steep, so the demand for bread is shown to be inelastic. It demonstrates the law of demand by showing how as the price of a good decreases, the quantity demanded also increases. 3. What is the equilibrium price of a loaf of bread? How can you tell this from the graph? (2 points) The equilibrium price of a loaf of bread is $5.50. I can tell the equilibrium price from the supply and demand graph because the points overlap. Section 2: Applying Changes to a Supply and Demand Graph Complete items 4 through 9. Use the supply and demand schedules to build a graph in the graphing area below. Then answer the questions that follow.
4. A shortage of grain has caused a change in the bakery's supply schedule. Use the supply schedule to graph each point of the new supply curve. Connect each point with a line to build a supply curve. Price of bread per loaf Quantity supplied $4.50 30 $5.00 35 $5.50 40 $6.00 50 $6.50 60 Explain why the supply curve changed as compared to the previous graph. (2 points) The curve has drastically changed because of the disruption in the supply chain. The shortage of grain causes there to be less supply, so the line shifts starting points from 40 to 30. The distance between the data points also decreases, as there is less bread in supply. 5. Customer demand for loaves of bread stays the same. Use the demand schedule to graph each point of the demand curve. Connect each point with a line to build a demand curve. Price of bread per loaf Quantity demanded
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