The Right Price

Activity Description

In this activity students find the best price for the brownies sold at their a bakery. Their goal is to make a minimum profit of $1500 over a period of three weeks. Students know the the cost of making the cookie is $1.00 and they have data that tells them the number of brownies that will be sold over a range of prices. The challenge is to determine the optimal price to sell the brownies to maximize the profit.

They start the activity with a budget of $1000 and then analyze the available data to identify the quantity they can produce and the price they should charge. They use these results to make and sell the brownie which will leave them with substantially more money to use in week 2.

They repeat this process in weeks 2 and 3 with larger budgets and with updated demand curves since customers are very happy. In the third week, they need to carefully produce just as many brownies as can be sold since their goal is to maximize their final profit at this point.

Learning Objective:

Students will understand the concepts of price, demand, cost, revenue, and profit and their inter-relationships in a business setting. Students will learn how to analyze market data to develop a demand curve for a product and to determine the optimal price that will maximize profit, rather than just maximizing revenue. Additionally, the task will help students understand the concept of unit cost and how it affects pricing decisions, as well as the importance of considering market competition, customer demand, and perceived value when setting prices. Finally, the task will also help students develop their critical thinking, problem-solving, and data analysis skills.

Learning Objective

The learning objective of this activity is to help students understand the relationship between demand, revenue, and profit in a business setting. By working through the task, students will learn how to analyze market data to determine the optimal price for a product that will maximize profit, rather than just maximizing revenue. Additionally, the task will help students understand the concept of unit cost and how it affects pricing decisions. Finally, the task will also help students develop their critical thinking, problem-solving, and data analysis skills.

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