President/CEO
Texas Council on Economic Education (TCEE)
economicstexas.org
Smarter.texas.org
[email protected]
713-655-1650
Describe how the free
enterprise system works
Market Price: Changes in Supply and Demand
•How do changes in demand affect market price?
•How does the market price guide what producers or
suppliers produce?
•Why must costs be subtracted from revenues to
determine profits?
•How can certain events cause costs to change, which
can affect profits?
What is meant by demand?
2. What are three things you demand
economically?
3. How much will you pay for them?
4. What determines if you demand/buy them?
1.
We will divide into factories with 4 to 6 workers
in each factory.
2. Choose a production manager.
3. Choose an accountant
1.
There will be 3 rounds of 5 minutes each.
2. You will produce any amount, but at least one of
the apple, hammer, shirt and cup/saucer in 2
inch dimensions.
3. Each product must have 2 colors.
1.
1.
2.
3.
4.
Each product must have 2 colors.
You may only use your hands – no capital.
You may specialize.
Produce at least one of each but as many as
possible.
1.
2.
3.
4.
Each product must have 2 colors.
You may only use your hands – no capital.
You may specialize.
Produce at least one of each but as many as
possible.
Count the quantity produced of each product.
2. Record the quantities on the “Revenues Worksheet”
3. We will do a class total.
4. We will draw a demand card.
5. We will determine prices and factory earnings.
1.
Supply, Demand and Market Price Chart
Goods
Supplied by
Class
Resulting
Market Price
With NO
Change in
Demand
Resulting
Market Price
with
Decrease in
Demand
Resulting
Market Price
with Increase
in Demand
0-8
$10
$8
$13
9-12
$7
$5
$10
13-16
$5
$3
$7
17-20
$3.50
$2
$4
Over 20
$2
$1
$3
Tally your round one results
2. Plan your production strategy for round 2.
3. The production manager has the final
authority on what to produce.
1.
1.
2.
3.
4.
Each product must have 2 colors.
You may only use your hands – no capital.
You may specialize.
Produce at least one of each but as many as
possible.
Count the quantity produced of each product.
2. Record the quantities on the “Revenues Worksheet.
3. We will do a class total.
4. We will draw a demand card.
5. We will determine prices and factory earnings.
1.
Supply, Demand and Market Price Chart
Goods
Supplied by
Class
Resulting
Market Price
With NO
Change in
Demand
Resulting
Market Price
with
Decrease in
Demand
Resulting
Market Price
with Increase
in Demand
0-8
$10
$8
$13
9-12
$7
$5
$10
13-16
$5
$3
$7
17-20
$3.50
$2
$4
Over 20
$2
$1
$3
What patterns do you see in the Supply,
Demand, and Market Price Chart?
2. In a market, what two things are needed for a
price to be determined?
3. What caused price to change?
1.
4. How did price influence your
production decisions?
5.
How did other groups
influence your strategy and
plans?
•How do changes in demand and supply affect
•market price?
•How does market price help producers determine what
to produce?
1. What trends do you see ?
2. What are three things you have learned about
how the market or free enterprise system
operates?
3. What concepts and TEKS would this activity
teach?
Supply
 MARKET SUPPLY AND MARKET PRICE CHART
 (Assume that DEMAND is Constant)
 Goods Supplied
 to the Market Resulting
 by the Class: Market Price:





0-8 = $10.00
9-12 = $7.00
13-16 = $5.00
17-20 = $3.00
Over 20 = $2.00
President
Texas Council on Economic Education
www.economicstexas.org
[email protected]
713-655-1650