Assume you are employed in a small restaurant in Bolton and your manager ask you to prepare a report describing following conce

The major factors affecting the restaurant business are the price and quality. The price and quality are in turn determined by several factors such as demand and supply. This paper focuses on how different factors and concepts can affect the operations of a restaurant business located in Bolton. The concepts that will be considered include market demand and supply, concepts of elasticity of demand and supply, determination of equilibrium, business organisation and behavior, and the market structure. Market Demand and Supply Analysis of demand and supply gives insights into how markets operate. Additionally, the demand and supply concepts explain how sellers are able to allocate prices to goods and services. Restaurant businesses deal with provision of goods and services. The restaurant industry is greatly influenced by the supply and demand forces. In a restaurant business, there is a need for balancing of resources, which are often scarce. Understanding supply and demand factors and their application in the restaurant business is crucial since it affects the sales and purchases and, hence, crucial decisions in a business. Supply and demand varies from place to place as well as with time (Parsa, et al., 2005. Taylor and Weerapana, 2011). The supply in a restaurant business is determined by several factors, which include the price of the goods. Tastes and preference of the consumers is another factor affecting the restaurant business. The number of consumers varies and this determines the quantity of foods that restaurants require to make. Additionally, the income level of people living around the restaurant, who comprise the prospective customers, determines the quantities of foods restaurants require to prepare. In Bolton, the number of restaurants is quite high. The commodity price, which is in this case food, is determined by both supply and demand. The commodity prices greatly affect the profitability of restaurants. Commodities such as vegetables and meat are affected by food production. When the prices for commodities are low, restaurants can reduce the prices of their foods without compromising on the profitability of the business. However, when commodity prices are high, it becomes hard to attract customers through price reduction since this would lead to losses (Greco, 2005. Taylor and Weerapana, 2011). The supply and demand affect the price of commodities in restaurant business. If the supply of raw food is less, the demand will be more resulting in increased prices. High prices for raw foods will reflect in the restaurant menu. For the restaurant at Bolton, the manager must assess how the price of the different ingredients required will affect the sales. Additionally, the manager must consider the economic statues of the customers to determine the ingredients to use. If the customers are willing to pay much, the manager should focus on upgrading the ingredients to improve the quality. In Bolton, the economic situation is considerably good and people are willing to spend much at eating out. Therefore, it would be advisable for the manager to focus on quality. Customers are likely to be interested more in the quality than in the price (McEachern, 2011). There must be ways of attracting customers and retaining them. Since the number of restaurants is considerably high, consumers will be tempted to try out different outlets. Therefore, a