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LESSON: LEMONADE FOR SALE
Summary:
The members of the Elm Street Kid’s
Club open a lemonade stand to earn money to build a new clubhouse.
Business is brisk for a while, as shown by the children’s bar
graphs. But in a few days, no one shows up to buy lemonade!
What could be going wrong?
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Concept: Supply and Demand
Definition: Producers
supply goods and
services and consumers demand them. Prices in the
market are determined by supply
and demand.
Comprehension
Questions
Who were the suppliers/producers in
the story?
The children in the Elm Street Kid’s Club
Why did they decide to make
lemonade?
They wanted to earn money – a profit – to use to fix
their clubhouse.
What were some of the productive
resources the children used to supply lemonade?
Lemons,
sugar, water, pitcher, spoons, table, tablecloth, the children
themselves
What was the demand for lemonade on
Monday, Tuesday, and Wednesday?
30 cups, 40 cups, and 56 cups
What was the price of the
lemonade?
$.25 a cup
What sales revenues (i.e. how much
money did they collect from sales) did the children earn from Monday
through Wednesday?
$31.50 (126 cups X $.25)
How much profit did the children
earn?
We can’t tell since we don’t know the cost of the productive
resources.
Profit = Revenues minus costs.
What happened to the demand on
Thursday? Why?
It dropped to 24 because all the people were
watching Jed the Juggler.
What idea did Sheri have for
increasing the demand for their lemonade?
They asked Jed to do his
juggling right next to their lemonade stand.
Did their idea work?
Yes,
Jed’s presence increased demand so much that their bar graph ran off the
top of the page!
What do businesses often do to get
more people to buy their goods and services?
Businesses regularly
advertise to inform consumers about their products and persuade them to
buy them; special sales, coupons, have famous people at the store to
attract customers, etc.
The children didn’t have to pay Jed
to help them bring customers. When businesses advertise, do they
have to pay money?
Yes! Advertising is a cost of doing
business. Businesses must pay a lot if they advertise in “prime”
locations and times, e.g. Super Bowl Sunday.
Do you think the children would be
willing to pay Jed to juggle next to their stand?
Explain.
Probably! They could pay Jed and still come out
ahead as long as the income they earned from the extra customers was more
than what they had to pay Jed.
Other Concepts: Profit, Productive
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