| Lesson Plan |
| Grade: |
Date: 25/02/2026 |
| Subject: Economics |
| Lesson Topic: Causes of market failure relating to public goods, merit goods, demerit goods, external costs and external benefits, abuse of monopoly power |
Learning Objective/s:
- Describe the characteristics of public, merit, and demerit goods and explain why markets under‑provide or over‑provide them.
- Explain how negative and positive externalities create market failure and identify appropriate government policies.
- Analyse how monopoly power leads to allocative inefficiency and evaluate regulatory responses.
- Apply the concepts to real‑world examples and construct basic supply‑demand diagrams illustrating welfare loss.
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Materials Needed:
- Projector and screen for slides/diagrams
- Whiteboard and markers
- Handout summarising market‑failure types and policy responses
- Worksheet with diagram‑labeling tasks
- Short video clip on monopoly regulation (optional)
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Introduction:
Begin with a quick poll: “What everyday products do you think the government should provide for free?” Use the responses to link prior knowledge of market supply and demand, then outline today’s success criteria – students will be able to identify causes of market failure and suggest suitable interventions.
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Lesson Structure:
- Do‑now (5’) – Students list examples of goods they think are “free” or “too cheap” and share with the class.
- Mini‑lecture (15’) – Define public, merit, and demerit goods; illustrate with diagrams of under‑/over‑provision.
- Externalities activity (15’) – Small groups analyse a case study (factory pollution) and complete a worksheet identifying private vs. social costs/benefits.
- Monopoly simulation (10’) – Role‑play a monopoly firm and a regulator; discuss price‑setting and dead‑weight loss.
- Concept‑check quiz (5’) – Quick Kahoot/hand‑raise questions to verify understanding of each market‑failure type.
- Diagram drawing (5’) – Students sketch one of the suggested diagrams (public good provision or externality cost curve) on their handout.
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Conclusion:
Summarise how each type of market failure reduces economic welfare and why government action is justified. Ask students to write one exit‑ticket: “Name one market failure and the most effective policy response.” For homework, assign a short research task to find a recent news article illustrating a market failure and propose a policy solution.
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