Lesson Plan Industry Sector
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## Demand in the Market Place

### Lesson Plan Overview / Details

This lesson teaches DEMAND and it's relevance to decision making for small business. It includes vocabulary, charts & graphs.

Classtime
55 Minutes

### Objectives and Goals

• Students will understand the relationship between supply and demand and pricing and production.
• Students will be able to define Demand, Law of Demand, Demand Schedule and Demand Curve.
• Students will Illustrate demand using tables and charts.
• Students will explain various causes that increase and decreased demand.

### Activities in this Lesson

• Baby its Cold Outside - Hooks / Set

Temperature set low in classroom, making it (slightly) uncomfortably cold. Set up containers of hot water for tea & cocoa, coffee with various flavorings & hot apple cider. (If not possible, see Alternative approach). NOTE - if teaching this topic during the summer, increase the classroom temperature and use cold beverages.

Teacher: “Oh, I’m really enjoying my hot tea this morning; it is so cold today. Do any of you have a favorite hot beverage you like on a cold morning like this?” Note types of drinks you have set out.

Ask who would like to purchase a hot beverage……. For \$5. Sell the drinks to whoever is willing to spend the \$5 (maybe nobody will buy it). Note on the board the number purchased at \$5. Ask the rest of the students why they didn’t they want to buy the drink. Lead them to the terms “willing and able.” Some people may want to buy it but are not able to, others may be able but not willing to purchase.

Repeat the process at the price of \$4, noting the total beverages purchased at that price. Repeat the process at the price of \$3, \$2 & \$1, or until you run out of drinks/supplies. Total the number of hot breakfast beverages purchased at each price, total the amount of dollars received at each price, and total the amount received for all purchases

Ask how many students would have liked a drink if it were free; how many would have a second drink if it were free, and how many would take one for a friend if it were free. Write the total number people would have taken at \$0.

Alternative Approach without actual beverages: write on board the students’ brainstormed list of hot breakfast beverages and say “Maybe this would be a good fundraiser for our (fill in need: bus for job shadow, company tour, etc.) selling hot beverages in the morning (ignore school policy at this point and just go with it). Write \$5 on the board and ask “Who would be willing to pay \$5 for your drink?” Write # on board next to the \$5 price. Discuss why this is not a good price. Ask “Who would be willing to pay \$4 for your drink?” Write the number on the board next to the \$4 price. Continue to the price of zero. Ask how many would get a second drink, or one for their friends, etc. Total the number of hot breakfast beverages that would be purchased at each price.

• Notes on Demand - Lecture

Explain that all businesses must know the expected demand for their products and services in order to make sound business decisions.

Tell students that today they will learn what is demand and how does it change with circumstances. Students will be expected to explain and illustrate consumer demand for a good or service, how and why it changes.

Vocabulary:

Demand: the amount of a good or and service a consumer is willing and able buy at various prices.

Law of Demand: As the price of a good or service decreases the quantity demanded increases.

Demand Schedule: A table showing the amount of good or service a consumer is willing and able to buy at various prices.

*NOTE – ignore the cost of goods and law of supply for this lesson. If questions arise, tell them we are only looking at demand right now, not supply.

• Demand Table - Demo / Modeling

Have students copy the chart, paying close attention to labeling and reinforcing vocabulary.

 Price    Quantity \$5            0 \$4            3 \$3            8 \$2            15 \$1             26 \$0            47

Teacher illustrates Demand on the board by drawing a “T” chart with the numbers generated in the opening discussion:

Have students copy the chart, paying close attention to labeling and reinforcing vocabulary.

• Timed Challenge - Check Understanding

Working in small groups, students are to brainstorm other ways to illustrate Demand, choose one way and sketch/draw/act it out.

5 minutes to brainstorm and plan. 30 seconds to demonstrate for the class.

Demand Curve: A graph that shows the amount of good or service a consumer is willing and able to buy at various prices.

More Practice

Students will graph information from the Demand Table generated from the purchase of beverages onto a Demand Curve.

This is the time for the teacher to demonstrate vertical axis and horizontal axis.

• Demand changes only if something else besides price changes.

Demonstrate to students how the demand curve will shift to the left if fewer items are demanded at each price.

Demonstrate to students how the demand curve will shift to the right if more items are demanded at every price.

In small groups, have students figure out how what direction the demand curve would shift if each of these News Alerts were true:

1. Water contaminated – don’t drink even if boiled!
2. Flu epidemic – half the student population is absent
3. Minimum wage increases 50%!
4. A. Frappachinos free today
5. B. Donuts free with hot beverages
6. Water main breaks - bathrooms closed all day.

Note taking:

Non-Price Factors Affecting Demand:

1. Consumer Taste & Preference
2. Market Size
3. Income
4. Price Of Related Goods
1. Substitute Goods
2. Complementary Goods
5. Consumer Expectations

### Assessment

Assessment Types:
Quiz

Students demonstrate their understanding of demand and construct demand tables & curves.