💰 When the price goes down, the line gets longer
Have you ever seen something on sale and immediately wanted to buy it? Today we’ll learn how the relationship between price and demand works, and how Henry Ford used this principle to revolutionize the history of the automobile.
📚 What is price?
Price is what a product or service costs. It can change depending on:
How many people want to buy it (demand)
How many products are available (supply)
What it costs to produce it
Price is defined in the market, where sellers and buyers decide together how much something is worth.
📉 What is demand?
Demand is the number of people who want and can buy a product at a certain price.
📏 Law of demand:
When price goes down, demand goes up.
When price goes up, demand goes down.
🍫 Example: If a chocolate costs $5, you think twice about it. But if it costs $1, you buy it happy!
🎯 Factors affecting demand
Demand does not depend only on price. They also influence:
💸 Income: If you have more money, you buy more.
❤️ Tastes and fashions: If something is in fashion, demand goes up.
🔄 Substitute products: If something similar is cheaper, you change your choice.
🤝 Complementary products: If gasoline goes up, demand for cars goes down.
📈 The demand curve
The demand curve is a graph that shows:
At low prices, many people buy
At high prices, fewer people buy
This curve is usually downward sloping, because that’s how the law of demand works.
🧊 Example: if an ice cream costs $1, it sells more than if it costs $5.
🏭 The case of Henry Ford’s Model T
Henry Ford did something amazing:
He used mass production to lower the cost of the Model T
He reduced the price from over $800 to just $290
Demand went through the roof!
🚗 Result: millions of people were able to buy a car for the first time.
✅ Ford showed how price and demand are connected. The lower the price, the more sales… and the more impact.
🤯 Did you know…?
- In 1913, the Model T was manufactured in just 93 minutes
- In 1924, it cost less than half of what it cost in 1908
- From the Model T, gas stations, paved roads and more connected cities were created
▶️ Watch this video to learn more
🔗 Demand and Supply Explained- Macro Topic 1.4 (Micro Topic 2.1)
💭 Your mind in action
💬 Reflect:
- What would you buy more of if it dropped a lot in price?
- Why does a popular product sometimes continue to sell even though it is expensive?
- What if all products cost the same, regardless of their quality?
- What do we learn from the Ford case about how to treat consumers?
🧠 Your turn:
Make a demand curve type graph with a product you like (video game, ice cream, toy). Show what happens when the price goes up or down.
🔍 Want to know more?
Other topics you may want to research:
- What is the law of supply?
- How is a price formed in the market?
- What is a monopoly?
- Why do some products become more expensive over time?
🛠️ Show what you know
Choose one or more activities to capture your learning:
- 📝 Write: A story about a store that lowered its prices and increased its sales.
- 🎤 Expose: Explain with everyday examples how price affects what people buy.
- 🧑💻 Create: A presentation on the impact of price on Model T sales.
- 🎭 Act out: Act out a scene where two friends compare prices and decide what to buy.
- 📸 Document: Make a comparison chart of products that decreased in price and increased in demand.
You can include this lesson in the school portfolio if the student completes activities from "Your mind in action", "Want to know more?", or "Show what you know", and keeps evidence of the work done (photos, writings, recordings, etc.).
🎁 In addition, if you are a subscriber, you can evaluate and grade this lesson using the downloadable guide available in your account.
