The quantity of bread sold is160-20 (x-0.7)/0.1= 300-200x.

(2)y=(x-0.5)(300-200x)。

(3)y=-200x^2+400x- 150

=-200(x- 1)^2+50，

When the price of bread is 1 yuan, the daily sales profit of this store is the largest, and it is 50 yuan.