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How would the laws of supply & demand relate to a local donut shop?

I have a project in economics and need help answering this question. How do they apply to a donut shop?

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18 Responses to “How would the laws of supply & demand relate to a local donut shop?”

  1. Danny said :

    Whether it succeeds or fails .

  2. BizMaster08 said :

    The same as with any other business in a very general sense, I would presume.

    Price impacts demand, so a decrease in donut price would theoretically cause an increase in donut demand. The opposite is also true. The donut shop must meet the demand with adequate supply, if they do not, it is considered a market failure. Businesses must price their products (donuts) to provide maximum profit, but not price themselves out of the market.

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