supply and demand case study for high school

Engaging Supply and Demand Project for High School Students

• March 29, 2023

If you’re a secondary economics teacher, you have probably covered the topics of supply and demand with your students. You might be looking for a fun summative project that ties these concepts together. If you are, I’ve got you covered! I had my students complete a supply and demand project where they had to create their own music festival lineup!

This is an engaging project for students and I’ll walk you through how to recreate it in your own classroom (or you can purchase the complete project here !). 

Supply and Demand Project Overview

The first step is to introduce this project to students. Explain to them that they will be creating a music festival, like Coachella, and that they are in charge of organizing the headliners or main attractions for their festival. For this project, students must select 3 headliners. Students must pick musicians who they think will sell the MOST tickets, not who they personally like. To figure out which musicians are in high demand, students must research top musicians.

Some questions that can help students think about musicians who are in demand are: 

• Who is currently on the Billboard top 100?
• Who has won an iHeartRadio Music Award?
• Who won the Grammy award for Album of the Year?
• Who has a lot of streams on Spotify? 

Once students have found their headliners, they must explain WHY they chose that headliner. Give students a graphic organizer, similar to the one below. They will use information from their research to justify each of their headliners. 

Music Festival Poster

Once students have selected their main, the next step is for them to create music festival poster! Creating a music festival poster is easier than it sounds. For this step, students will log into canva.com (if they don’t have an account, they can sign up for free!). 

After creating an account, they will click on “create a design” in the upper right side corner of the website. From there a pop down list will appear. From the drop down list they will click on “posters.” Students can browse through the poster templates to choose a template they like.  

Then, students will start typing in their three main headlines. Students can type other musicians under the headliners if they like! (see example below). Students will need their posters so that they can conduct their in-class surveys! 

Measuring Demand for Their Festival

Once students complete their music festival poster, they’re ready to conduct in-class surveys! The purpose of the in-class survey is for them to figure out demand for music festival lineup. Students will use a tally sheet like the one below to keep track of their information. 

For their in-class surveys students will have their festival poster ready so that they can share who will be performing at their Music Festival. They will ask their classmates the following question: How much would you be willing to spend on this Music Festival Lineup (choose ALL that apply)?

Students will put a tally mark next to each price their classmates are willing and able to purchase tickets for their music festival. Students must survey at least 15 people. You may give your students 10-15 minutes to conduct their in class survey. 

Once students have completed the in class survey, they will turn the data from their tally sheet into a demand schedule. 

Supply Curve and Demand Curve

Next students will use data from their demand schedule and an already made supply schedule (like the one below) to plot the information on to a graph. 

Once students have plotted the information on a supply and demand curve, they will be able to complete a report on their findings. For their report they will answer the following questions:

• Explain what the equilibrium price would be for your festival and how you determined the equilibrium price.
• Explain why you wouldn’t charge a higher or lower price. What problems would occur if you did? Identify the prices that would lead to a shortage and surplus.
• Summarize two scenarios that will lead to a chance in the price of your festival ticket. One scenario must show an increase in price. The second scenario will cause a decrease in price (Hint: think about the determinants of demand). 

This project is a great way to get students up and moving and thinking about supply and demand without even knowing it!

You can recreate this project in your class or purchase the complete project here . The complete project includes rubrics, a suggested teaching guide, and graphic organizers. 

Happy teaching!

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10 Supply and Demand Activity Ideas for Your Students

• EdTech News

Introduction:

Teaching supply and demand to students can often be challenging, but with the right activities, you can help them better understand this important economic concept. Here are 10 engaging and fun supply and demand activity ideas that will help your students grasp the fundamentals of this economic principle.

1. Lemonade Stand Simulation:

A classic way to teach supply and demand using a lemonade stand simulation. Divide the class into small groups, each group running their own lemonade stand. Encourage them to set prices, determine production levels, and adjust pricing based on factors like weather and customer preferences.

2. Role-Playing Activities:

Organize role-playing activities where students act as buyers or sellers to simulate real-life market scenarios. For instance, have some students act as shopkeepers selling candy while others act as customers with varying budgets.

3. Prices Auction:

Hold an auction in which several items are auctioned off to the highest bidder. Have students bid on these items using play money provided earlier. Analyze the data and discuss the relationship between supply, demand, and item prices.

4. Real-Life Market Research:

Send students on a market research mission where they will visit stores as “secret shoppers” to observe product pricing strategies and inventory levels. Then, have them share their findings with the class for an open discussion on supply and demand dynamics.

5. The Stock Market Game:

Introduce your students to the stock market by having them select a stock of their choice or assigning one to them. Over a predetermined period of time, track its performance together as a class and discuss how changes in supply or demand influence stock prices.

6. Product Creation Activity:

In groups or individually, have students create a product from scratch by considering both cost of materials and target audience needs or wants. This exercise encourages students to think about product pricing based on market demand.

7. Price Controls Simulation:

Teach your students about price ceilings and price floors using a simulation activity. Create different market scenarios with predetermined prices or price limits and have students analyze the impact on supply and demand.

8. The Elasticity Experiment:

Introduce concepts of elastic and inelastic goods by having students calculate the cross elasticity of demand for certain combinations of products. For example, they can compare how the demand for coffee changes when the price of tea changes.

9. Case Studies:

Analyze real-life case studies that focus on supply and demand principles, such as the De Beers diamond market or the OPEC oil crisis. Encourage students to identify key factors that influenced the markets in each case and discuss strategies adopted by key players in response.

10. News Analysis Activity:

Create a weekly or monthly news analysis activity where students research news articles related to supply and demand issues. Have them present their findings to the class, highlighting major points that illustrate the concepts they’ve learned.

Conclusion:

A variety of activities can keep your economics lessons fresh while allowing students to develop a deep understanding of supply and demand principles. These 10 engaging activity ideas will surely help spark curiosity and facilitate critical thinking among your students as they explore these fundamental economic concepts.

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Demand, Supply and the Market

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• Right Start in Teaching Economics
• Demand, Supply and the Market…

Lesson Purpose:

This lesson focuses on suppliers and demanders, the participants in markets; how their behavior changes in response to incentives; and how their interaction generates the prices that allocate resources in the economy. Learning about the reaction of demanders and suppliers to price, and the impact of non-price conditions (the determinants of demand and supply) creates a foundation for understanding the dynamism of markets. Examining the interaction of consumers and producers as they respond to market conditions also generates an appreciation for the role of prices in transmitting information that coordinates the economic response to scarcity.  The dynamics of the market, a vital part of students’ understanding of economics, may be explained with tables and narrative, or with graphs, or both – whatever is best suited to individual learning styles.

Content Standards:

Standard 7: Students will understand that: Markets exist when buyers and sellers interact.  This interaction determines market prices and thereby allocates scarce goods and services.  Students will be able to use this knowledge to: Identify markets in which they have participated as a buyer and a seller and describe how the interaction of all buyers and sellers influences prices. Benchmarks: grade 8:

• Relative price refers to the price of one good or service compared to the prices of other goods and services.  Relative prices are the basic measures of the relative scarcity of products when prices are set by market forces (supply and demand).
• The market clearing or equilibrium price for a good or service is the one price at which quantity supplied equals quantity demanded.
• If a price is above the market clearing price, it will fall, causing sellers to produce less and buyers to purchase more; if it is below the market clearing price, it will rise, causing sellers to produce more and buyers to buy less.
• A shortage occurs when buyers want to purchase more than producers want to sell at the prevailing price.
• A surplus occurs when producers want to sell more than buyers want to purchase at the prevailing price.
• Shortages of a product usually result in price increases in a market economy; surpluses usually result in price decreases.

Standard 8: Students will understand that: Prices send signals and provide incentives to buyers and sellers.  When supply or demand changes, market prices adjust, affecting incentives. Benchmarks: grade 8:

• An increase in the price of a good or service encourages people to look for substitutes, causing the quantity demanded to decrease, and vice versa. This relationship between price and quantity demanded, known as the law of demand, exists as long as the other factors influencing demand do not change.
• An increase in the price of a good or service enables producers to cover higher per-unit costs and earn profits, causing the quantity supplied to increase, and vice versa. This relationship between price and quantity supplied is normally true as long as other factors influencing costs of production and supply do not change.
• Markets are interrelated; changes in the price of one good or service can lead to changes in prices of many other goods and services.
• Demand for a product changes when there is a change in consumers’ incomes or preferences, or in the prices of related goods or services, or in the number of consumers in a market.
• Supply of a product changes when there are changes in the prices of the productive resources used to make the good or service, the technology used to make the good or service, the profit opportunities available to producers by selling other goods or services, or the number of sellers in a market.
• Changes in supply or demand cause relative prices to change; in turn, buyers and sellers adjust their purchase and sales decisions.

Session Objectives :

• Define demand.
• Develop narrative, chart, and graphic models of demand.
• Distinguish between demand and quantity demanded.
• Introduce the Law of Demand.
• Identify the determinants of demand.  Demonstrate changes in demand – in narrative, chart, and graphic format.
• Identify and explain common errors in thinking about demanders’ reactions to price incentives.
• Define supply.
• Develop narrative, chart, and graphic models of supply.
• Compare/contrast the behavior of consumers and suppliers in response to price incentives.  (Emphasize secondary school students’ inexperience with the supplier role.)
• Distinguish between supply and quantity supplied.
• Identify the determinants of supply.  Demonstrate changes in supply – in narrative, chart, and graphic format.
• Identify and explain common errors in thinking about suppliers’ reactions to price incentives.
• Illustrate the determination of a market clearing price/equilibrium price under static and dynamic conditions.
• Illustrate the impact of the invisible hand of competition on supply, demand, and price in markets.

Key Content:

• Quantity demanded (qd) is the number of items that will be purchased at a particular price.
• Law of demand, also known as “price effect.”
• Demand is the amount of an item people are willing and able to buy at a set of prices during a specific time period.
• The determinants of demand are number of buyers, income, tastes and preferences, price expectations, and prices of substitutes and complements.
• Demand determinants are also referred to as demand shifters because they change the qd at all prices, as indicated by a change in the position of the demand curve.
• Quantity supplied (qs) is the number of items that will be offered for sale at a particular price, during a specific time period.
• Law of supply
• Importance of profit motive
• Supply is the amount sellers are willing and able to offer for sale at a set of prices.
• The determinants of supply are numbers of producers, expectations, the prices of other things that could be produced, and things that determine costs of production (including resource availability and technology).
• Supply determinants are also referred to as supply shifters because they change qs at all prices, as indicated by a change in the position of the supply curve.
• Suppliers cannot control price; they can only control the quantity they supply.
• Market prices emerge from the interaction of supply and demand.
• The equilibrium, or market clearing, price is the price at which qs = qd.
• Equilibrium prices change in response to changes in the determinants of supply and/or demand.
• In a free market, suppliers are motivated to find the market clearing price because it is the point of maximum total profit.
• In competitive markets, suppliers cannot “set” any price they want:  there is a difference between a price tag and a market price. (Topic 5 explains how market structure affects suppliers’ market power.)
• Both buyers and sellers react to price changes in predictable ways, ensuring that resources are used in their most valuable ways.

Mythconceptions:

• Demand for a good or service is constant.
• Supply of a good or service is constant.
• Supply and demand curves move “up” and “down.”
• Prices in the market are set by suppliers.
• Demand and quantity demanded are the same thing.
• Once price is ‘set’ it remains at that level.
• Markets ‘know our name.’
• Markets function independently.
• Goods and services are equally important to buyers.
• When the price of an item increases consumers will always buy less of the item.

Frequently Asked Questions:

• Why do prices change?
• If people buy more when price falls, why does a price increase indicate that demand increased?
• What determines the demand / supply of a product?
• If people would produce more or work longer for higher pay, why does a price (wage) decrease indicate a supply increase?
• Why do producers supply less of some items at lower prices?  Don’t they need to make more to make enough money?  (Why do producers supply more of some items at higher prices?  Don’t they need to make fewer to make the same amount of money?)
• If price is ‘low’, shouldn’t a supplier just try to sell more?
• Why can’t ‘more’ of an item always be supplied?
• Once price is determined, why / how can it change?
• What is the relationship between price, profit and resource allocation?
• Is it always in the best interest of a business to raise the price of its product(s)?
• Why will some people continue to buy products whose prices continue to rise?

Classroom Activity Options

• Have students conduct surveys and generate their own demand schedules (tables) for a commonly purchased lunch item – slices of pizza, for example. Associate the law of demand with students’ own behavior, as represented in their demand schedules.
• Have students create a supply schedule for the numbers of hours they would work per week at a hard physical task and various rates of pay – digging ditches, for example. Associate the law of supply with students’ own behavior, as represented in their supply schedules.
• Provide practice problems in which students plot demand and supply curves from schedules or charts.
• Conduct a classroom simulation in which students experience the emergence of equilibrium price and quantity from the un-orchestrated interaction of buyers and sellers.
• Provide practice problems – both graphic and narrative – in which students identify the market impacts of changes in the determinants of demand and/or supply.
• Provide practice problems – both graphic and narrative – in which students must distinguish between changes in demand and quantity demanded, and changes in supply and quantity supplied.
• Provide practice problems in which students compose narrative explanations based on graphic models, and graphs based on narratives.

Handouts and Supplemental Materials

Practice problems

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