1. 
Lauren was talking with
her parents about starting
her own lemonade stand
over dinner one night.
They got into a discussion
about supply and demand.
Lauren had never heard of
such a thing. Her parents
had informed her that
there might be other
people selling the same
product for less. She had
to do some research to
ensure she would make
the most money for her
product.
Have you ever tried to become successful at
selling something? What things did you have to
think about before getting started?

2. Starting a business


Lauren collected all of the
things she would need.
She borrowed money from
her parents to get
lemonade, cups, sugar,
and a stand.
Next, she had to decide
how much she was going
to sell her lemonade for.
If you were Lauren, how
much would you sell it for?
Why?

3. 
Lauren decided to sell her
lemonade for $.50. She
made her stand and
decided to start on the
hottest day of the
summer. It was 95
degrees outside and she
had her lemonade stand
on a very busy corner. A
lot of runners, bike riders,
and dog walkers would be
crossing her path.
How successful do you predict Lauren’s
Lemonade stand will be? Why?

4. 

Lauren sold out of her
lemonade within an hour. She
made $25.00. She used $10
to buy more supplies for the
following day leaving her with
a profit of $15.00
She was shocked and did not
understand why she sold out
so quickly. She decided to
ask her parents.
Why do you think Lauren sold out so quickly?
What factors contributed? Turn and talk.

5. 

Lauren asked her parents her
question. They told her that it
was because of supply and
demand. Her demand (how
many people want her
product) was high because of
weather conditions. She also
chose a high traffic area. Her
supply (how much of a
product one has) was low so
people wanted her product.
Lauren thought about it and
figured that if this was true,
she could change her price
tomorrow. She couldn’t decide
if she should make it higher
or lower.
Write in your journal whether you
think Lauren should raise her
price or lower it. Why?

6. 


The next day, Lauren decided to change her price to
$1.00. The weather was the same. She went out to the
same spot. This time she made $45.00.
She was shocked! Lauren had realized since her demand
was high, and her supply still low, she could raise the
price and people would still pay for it.
She decided tomorrow she would do the same thing again

7. 


Lauren went back out the
following day with her
lemonade for $1.00. This time
there was another lemonade
stand selling lemonade for $.50
– Lauren didn’t sell hardly ANY
lemonade.
She was confused. It was still
hot outside. She still didn’t
have a high supply.
She went home to ask her
parents.
Circle the things you think Lauren
should change for tomorrow
1. her lemonade recipe
2. her price
3. The location
4. The way her stand looks.
Write in your journal why you
picked the things that you did.

8. 


Lauren talked to her parents that night. They explained
supply and demand to her yet again. They said that when
someone’s demand is high (like hers was), then they can
raise the price. But when competition comes along, the
demand drops, which means the price needs to drop also.
They also told her when the supply is high and everyone is
able to receive the product, that the demand is lower.
Lauren was disappointed that she could not sell her
lemonade for more money.

9. 


The final lemonade day,
Lauren lowered her price
again to $.50 in order to
keep up with the
competition. She was
selling lemonade fast. Her
competition was sold out
first. All of a sudden there
was a rush to her stand.
She only had 7 glasses
left.
WHAT SHOULD SHE DO??
Record in your journal.
Knowing what you know
about supply and demand,
what should Lauren do?

10. 


Lauren decided to raise her price back up to
$1.00.
Q: Why was she able to do this??
A: Her demand was very high. She was the only
person with lemonade product and many people
wanted it. Her supply was also very low since it
was the end of the day and people were hot.