The Right Price Challenge
Lab Description
The key idea of this lab is to teach students about pricing, the importance of the demand curve in finding the right price, and finally how the price affects their profit.
Students are given a problem statement "Your friend owns a bakery that sells cookies and brownies. Unfortunately, the store is currently not making much of a profit. You believe that the bakery can make a larger profit just by being better at setting prices.".
Based on this storyline, students are challenged to produce a profit of $2,000 in three weeks. To start the challenge, they are given an initial fund of $1,000 which can be used to buy the ingredients.
To solve the challenge, students will build their knowledge on the key economic definitions, they will understand the relationship between price and demand, etc., all using interactive activities. Students will then set the price for each week and adjust it until they can make $2,000 profit by the third week.
Students will also write a detailed report on the reasoning behind their prices.
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