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Financial literacy activity

Supply and Demand Lemonade

Pretend to sell lemonade at different prices! See what happens when you charge more or less. Learn that people buy more when the price is low and less when it is high.

Hands OnAbout 25 minutesScreen-freeParent help expected

Materials and setup

How this changes by age

Pre-K (ages 3–4)

Pretend to sell lemonade at different prices! See what happens when you charge more or less. Learn that people buy more when the price is low and less when it is high.

Difficulty 1 of 3

Steps

  1. Set up a pretend lemonade stand with cups and play money.
  2. Put up a sign that says '1 coin per cup.' Give stuffed animals or family members play money to buy cups.
  3. Count how many cups you sell at 1 coin each.
  4. Change the price to 3 coins per cup. How many cups do you sell now?
  5. Talk about it: 'When the price went up, fewer people wanted to buy. That is called demand!'

Learning objectives

  • Observe that more people buy when the price is lower
  • Practice setting up a simple selling scenario
  • Begin to understand the concept of price and demand

Kindergarten (ages 5–6)

Run a lemonade stand experiment! Change prices and track how many cups sell at each price. Make a simple chart showing price versus cups sold. Discover supply and demand in action.

Difficulty 2 of 3

Steps

  1. Set up a lemonade stand with cups, lemonade mix, and price signs.
  2. Start at 1 coin per cup. Family members 'buy' with play money. Record how many sell.
  3. Raise the price to 2 coins, then 3 coins. Record sales at each price.
  4. Make a simple bar chart: price on one side, cups sold on the other.
  5. Discuss: 'Why did fewer people buy at 3 coins? Would you buy something expensive or wait for a sale?'

Learning objectives

  • Track sales data at different price points
  • Create a simple chart comparing price and quantity sold
  • Explain in their own words why higher prices mean fewer buyers

Early elementary (ages 6–8)

Design a lemonade pricing experiment with supply and demand. Test three price points, calculate revenue at each, and figure out the 'sweet spot' price that earns the most money. Introduce the idea of scarcity.

Difficulty 2 of 3

Steps

  1. Set up a lemonade stand with 15 cups available. Make price cards for 25 cents, 50 cents, and 1 dollar.
  2. Round 1: Price at 25 cents. Family members decide how many to buy. Record cups sold and revenue (cups x price).
  3. Round 2: Price at 50 cents. Repeat and record. Round 3: Price at 1 dollar. Repeat and record.
  4. Calculate total revenue for each round. Which price earned the most money?
  5. Scarcity experiment: Announce 'Only 5 cups left!' at the 50-cent price. Do more people want to buy now?
  6. Discuss: What is the best price? Why does scarcity (limited supply) make people want something more?

Learning objectives

  • Calculate revenue by multiplying price times quantity sold
  • Identify the price point that maximizes total revenue
  • Understand how scarcity affects demand and willingness to pay

Upper elementary (ages 8–10)

Run a full supply and demand simulation. Set prices, track quantity demanded and supplied, find the equilibrium price, and explore what happens during shortages and surpluses. Graph supply and demand curves and analyze real-world examples.

Difficulty 3 of 3

Steps

  1. Create a supply and demand table: at prices from 25 cents to 2 dollars, write how many cups buyers want (demand) and how many the seller is willing to make (supply).
  2. Graph both on the same chart. Find where the lines cross — that is the equilibrium price where supply equals demand.
  3. Simulate a shortage: set the price below equilibrium. More people want to buy than you can supply. What happens?
  4. Simulate a surplus: set the price above equilibrium. You have leftover cups nobody wants. What do you do?
  5. Research a real-world example: Why do concert tickets cost more when the artist is popular? Why do holiday toys sell out?
  6. Write a one-page analysis of your experiment: equilibrium price, what causes shifts in supply and demand, and your real-world example.

Learning objectives

  • Graph supply and demand curves and identify the equilibrium price
  • Explain what causes shortages and surpluses using economic reasoning
  • Apply supply and demand concepts to analyze real-world pricing scenarios

Safety and evidence note

Read the full activity before beginning. An adult should supervise tools, heat, food, outdoor work, movement, and experiments as appropriate. Completion records that the activity was done; the child’s explanation, work sample, photo, or demonstration is stronger evidence of learning than a completion check alone.

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