Cake Supply Curve
S1: Cake business starting point
Cake Demand Curve
Market Equilibrium
When a market is in equilibrium, the quantity demanded
equals the quantity supplied at the price that clears the
market. This is the equilibrium price. Price will not change
unless there is an external factor.
Exceed Supply: Reduce the price.
Exceed Demand: Put up the price.
Quantity
S2 S3
Price
S1
Quantity
D2
D1
D3
Price
S3: Price increase and quantity decrease
=> Supply decrease
S2: Price decrease and quantity Increase
=> Supply Increase
D1: Cake business starting point
D3: Price decrease and quantity decrease
=> Demand Decrease
D2: Price increase and quantity Increase
=> Demand Increase
Supply & Demand
Quantity
Price
S1
D1
Exceed
Supply
Exceed
Demand
