| Lesson Plan |
| Grade: Year 12 |
Date: 25/02/2026 |
| Subject: Economics |
| Lesson Topic: relationship between price elasticity of demand and a firm’s revenue: in a normal downward sloping demand curve |
Learning Objective/s:
- Describe how price elasticity of demand influences total revenue on a downward‑sloping demand curve.
- Explain the revenue implications of elastic, unit‑elastic and inelastic demand.
- Apply the elasticity‑revenue relationship to choose appropriate pricing policies (penetration, premium, revenue‑maximising).
- Analyse a numerical example to calculate the effect of price changes on total revenue.
- Evaluate how firms can use elasticity information to align pricing with their objectives.
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Materials Needed:
- Projector or interactive whiteboard
- Slides with demand‑elasticity diagrams
- Handout containing the elasticity tables and numerical illustration
- Calculator or spreadsheet template for revenue calculations
- Whiteboard markers and chart paper for group activity
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Introduction:
Begin with a quick poll: “If a product’s price falls, does the firm earn more or less?” Connect this to prior learning on demand curves and state today’s success criteria – students will predict revenue changes from price adjustments using elasticity concepts.
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Lesson Structure:
- Do‑now (5’) – Students answer the poll and write a brief justification.
- Mini‑lecture (10’) – Review elasticity formulae, the MR relation, and revenue outcomes for elastic, unit‑elastic and inelastic demand with a diagram.
- Guided practice (12’) – Pairs work through the numerical illustration, calculate new total revenue and discuss the results.
- Policy application activity (10’) – Groups match firm objectives (profit, revenue, growth, CSR) to the appropriate pricing strategy using the elasticity table.
- Check for understanding (8’) – Exit ticket: state the price change a firm should make when demand is elastic versus inelastic.
- Summary & homework briefing (5’) – Recap key points and assign a short problem set.
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Conclusion:
Recap that the direction of revenue change depends on whether demand is elastic, unit‑elastic or inelastic, and that firms align pricing policies accordingly. For the exit ticket, students write one price‑adjustment recommendation based on a given elasticity scenario. Homework: complete the worksheet with two additional price‑elasticity calculations.
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