Teaching Supply & Demand
You demand. Shmoop supplies.
Supply and demand seems easy enough. If there's demand for a product or service, someone will supply it. But of course, it's a little more complicated than that, and we can help you explain it.
In this guide you will find
- a graphing activity on supply and demand curves.
- an activity on price elasticity that won't stretch your limits.
- discussion questions exploring today's competitive tech marketplace.
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Inside each guide you'll find quizzes, activity ideas, discussion questions, and more—all written by experts and designed to save you time. Here are the deets on what you get with your teaching guide:
- 3-5 activities to complete in class with your students, with detailed instructions for you and your students.
- Discussion and essay questions for all levels of students.
- Reading quizzes to be sure students are looking at the material through various lenses.
- Resources to help make the topic feel more relevant to your 21st-century students.
- A note from Shmoop's teachers to you, telling you what to expect from teaching the topic and how you can overcome the hurdles.
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Instructions for You
1. Review the concepts of price elasticity and inelasticity of demand. Remind students of the benefits of identifying products with inelastic demand.
2. Break your students into groups and ask them to identify or develop a product or service with inelastic demand. You might want to take the products mentioned in the reading off the table (milk, medicine, matches, salt, and gasoline).
3. Ask each group to present its product or service and explain why its demand is inelastic.
4. Have the groups prepare to defend the superiority of their product by showing the actual elasticity of demand for the other groups' products. Suggest that they review the factors influencing demand: the availability of substitutes, the price of complementary goods, shifting consumer tastes, and changes in income. Also, remind students that demand for some goods becomes more elastic over time as people respond to rising prices.
5. Ask each group to present its case against the other groups' products. Following this you have a few options.
- You can establish a scoring system and declare a winning group.
- You can ask the groups to generate a list of "rules for producing goods with inelastic demand."
- You can ask the groups to incorporate the critiques of their product into a new and improved product with even greater inelasticity of demand.
Instructions for Your Students
Imagine two stores. One sells high-end waffle irons and discount jewelry. The other sells the only water available in a fifty-mile radius. Which store will have people coming through the door even if prices skyrocket, and why?
If you are thinking of getting involved in business, you might consider providing a good or service that people cannot do without—even if the price rises. Economists refer to this trait as inelasticity of demand. In contrast, goods that lose much of their appeal when their prices rise have "elastic" demand.
Get ready to join forces with your peers in pursuit of the perfect product.