Economics · Lesson Plan

Supply and Demand

The laws of supply and demand explain how a market sets the price and quantity of goods. In this hands-on lesson, students receive classroom currency and bid in three auctions — a low-demand item, a single high-demand item, and the same item in high supply — then discover for themselves how scarcity and abundance move prices. An activity sheet locks in the vocabulary.

Grades 6–10 Lesson Plan 45–60 minutes Free Lesson Plan Lesson & Activity: Full Membership

For Teachers

Lesson at a glance

Topic: Economics
Grade Level: Grades 6–10
Resource Type: Lesson + Worksheet
Estimated Time: 45–60 minutes
Format: Lesson + activity
Materials: Printable lesson, worksheet, whiteboard

What Students Learn

Learning objectives

Define supply and demand
Describe what happens when demand exceeds supply
Describe what happens when supply exceeds demand
Give real examples of each situation
Connect auction prices to scarcity and abundance

Materials

What you’ll need

Printed lesson and activity sheet (one per student)
Classroom currency (play money) for bidding
One undesirable item and a set of desirable treats to auction
Whiteboard for the price/quantity record

Key Terms

Vocabulary

Supply: The quantity of a good or service available to buy.
Demand: How many people are willing and able to buy at a given price.
Price: What buyers pay and sellers receive for a good.
Scarcity: Limited availability of a good relative to demand.
Surplus: When supply exceeds demand.
Price stabilization: The balance reached when supply and demand are matched.

For Teachers

Lesson plan

Estimated time: one 45–60 minute class period.

Lesson sequence

Set up (8 min). Give each student a small grant of classroom currency; explain the auction rules.
Run three auctions (20 min). Auction A (low-demand item), Auction B (one high-demand treat), Auction C (“discover” 25 more of the treat). Record winning bids.
Discuss (12 min). Why did Auction B fetch more than C? Why did A go cheap? Lead students to define supply and demand.
Activity sheet (10 min). Students write a paragraph using supply, demand, price, increase, decrease, and give examples of each imbalance.

Assessment

Assess the completed activity sheet for correct use of the vocabulary and sound examples.

The lesson that follows. Why Consoles Cost More: Supply, Demand and a Chip Shortage takes the same idea further for grades 9–12, with a video: students find the price where a market settles before and after supply falls, and sort real events by which side of a market moved.

Discussion

Discussion questions

What is the difference between supply and demand?
What happens to price when demand exceeds supply?
What happens to price when supply exceeds demand?
Why did the single treat sell for more than when there were many?
Where have you seen supply and demand at work in real life?

Printable Lesson & Activity