Lesson Plan

• Describe how price elasticity of demand (PED) is calculated using the midpoint method.
• Interpret the size and sign of the PED coefficient to classify demand as elastic, unit‑elastic, or inelastic.
• Analyse how relative percentage changes affect revenue and pricing decisions.
• Apply determinants of PED to real‑world examples.
• Evaluate short‑ and long‑run impacts on PED using case‑study data.

• Projector and screen
• Whiteboard and markers
• Printed worksheet with PED calculations
• Graph paper or digital graphing tool
• Calculator (or spreadsheet) for midpoint method
• Sample price‑quantity data set (e.g., coffee market)

Begin with a quick poll: “If the price of your favourite drink rises 10 %, how much would you cut back?” Use responses to highlight why percentage changes matter. Review the concept of elasticity as a ratio of percentage changes and set the success criteria: students will calculate PED, interpret its sign and magnitude, and link it to business decisions.

1. Do‑Now (5’): Quick poll results & short discussion on intuition about price changes.
2. Mini‑lecture (10’): Define elasticity, introduce midpoint formula, and show the sign convention.
3. Guided practice (12’): Work through the coffee example together, filling in the worksheet step‑by‑step.
4. Independent activity (10’): Students calculate PED for a new data set and classify the result.
5. Concept check (5’): Exit‑ticket – one sentence explaining what a PED of –0.4 indicates about pricing power.
6. Application discussion (8’): Relate PED outcomes to revenue, tax policy, and production decisions.

Summarise how the magnitude and sign of PED guide firms in pricing and forecasting revenue. Collect exit‑tickets and highlight common misconceptions. Assign homework: students must find a recent news article on a price change, estimate the PED using reported figures, and write a brief interpretation.