Lesson Plan

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Lesson Plan
Grade: Date: 17/01/2026
Subject: Economics
Lesson Topic: other pricing policies: limit pricing
Learning Objective/s:
  • Describe the concept and purpose of limit pricing.
  • Explain the conditions required for successful limit pricing and differentiate it from predatory pricing.
  • Analyse a simple numerical example to calculate a limit price and assess its impact on entry decisions.
  • Evaluate the advantages, disadvantages, and legal considerations of limit pricing.
Materials Needed:
  • Projector and screen
  • PowerPoint slides with diagrams and tables
  • Worksheet with limit‑pricing calculations
  • Whiteboard and markers
  • Handout summarising key features and the comparison table
 Introduction:
Begin with a quick poll: “What strategies might a dominant firm use to keep new rivals out?” Review students’ prior knowledge of pricing strategies and entry barriers, then state that today they will explore limit pricing, its calculation, and its legal and economic implications. Success will be shown by correctly calculating a limit price and distinguishing it from predatory pricing.
Lesson Structure:
  1. Do‑now (5’) – Students answer the poll on the board and share ideas.
  2. Mini‑lecture (10’) – Define limit pricing, outline key features, and present the comparison table with predatory pricing.
  3. Group activity (15’) – Using a worksheet, students calculate a limit price from given cost data and discuss whether entry is deterred.
  4. Comparison discussion (10’) – Groups compare limit pricing to predatory pricing, citing objectives and legal status.
  5. Diagram construction (10’) – Each student sketches the demand curve, MC, AVC, and ATC, marking the limit price.
  6. Check for understanding (5’) – Quick quiz (exit ticket) on conditions for successful limit pricing and its risks.
Conclusion:
Recap that limit pricing is a short‑run deterrence tool that trades off some profit to protect long‑run market power. Students write one advantage and one risk on a sticky note as an exit ticket. For homework, assign a brief case study where they decide whether a firm should adopt limit pricing and justify their choice.