Supply and Demand Activity

Part 1

- Split the classroom evenly, half the kids in the front of the room and the other half in the back.
- Provide the sellers with an object (Candy, Gold Pencil, etc.)
- Explain that the sellers are trying to get as much money as they can from the buyers, and the
buyers want to spend as little as possible.
- Show the sellers what the min price is they can sell the object for, $30. (Do not let the buyers
see that number and instruct the sellers not to tell what that number is)
- Show the buyers what the max price they can spend is, $130. (Again, do not tell the sellers what
the max is)
- Encourage the sellers to get as much as they can, and the buyers to spend as little as they can.
- Once the price is negotiated, the students should record that price on the board. Once all prices
are recorded, average them out.

Part 2

- Same as part 1, however, switch the students. The buyers become sellers and vice versa.
- Also, for round two, you must switch the min/max bid slightly (tell the students the min/max are
changing, but don’t say by how much.
- This time, seller’s min price is 25 and the buyers max bid is 125
- Once the deal is made, write the number on the board, average.

Part 3

- Have the buyers and sellers split to the front and the back of the room again.
- Now explain that there is a shortage of your object (candy bar, gold pencil, etc.)
- Take away the objects from half of the sellers and explain that they now need to move to the
buyer’s side. So, 75% of the kids are now buyers and 25% are now sellers.
- Next, show the min/max to both sides, again, nobody should share the min/max between
buyers and sellers. (buyer max = 125/ seller min = 25)
- The sellers should be able to get a lot more money for their item as there are now more buyers
and only a few items to bid on. (demand is high, therefore, the cost should go up as people bid)
- Write the final sales prices on the board again.

Part 4
- Same as part 3, however, there is now a surplus of your item. 75% of the class should now be
seller’s while 25% of the class should be buyers.
- This should see the kids competing to buy the item at a much lower cost because there are so
many sellers, there is now a surplus, which would drag the cost down.