Marketplace Simulations: Price Elasticity In Practice

The Price Elasticity in Practice microsimulation is designed for undergraduate or graduate business courses with a price elasticity component. This tutorial requires a basic understanding of pricing issues. The Marketplace Microsimulation: Fundamentals of Pricing covers that and pairs well with this exercise.
Students guide a small coffee roasting business to smartly adjust prices as it struggles to stay profitable due to a supply cost increase. This interactive microlearning exercise focuses on the price elasticity of demand, and how to use this concept to make price adjustments. Students learn about the price elasticity formula and discover how to determine whether a price-demand relationship for a specific product is elastic or inelastic. They test this new knowledge in practice by taking on the role of the owner of a coffee roasting business. After learning that their supply costs have increased, they use the price elasticity of demand concept to decide how to adjust the price of two products to maximize profits.
Price Elasticity in Practice is part of the Marketplace microsimulations ecosystem. The quick format, bite-sized delivery, and individualized pacing increase student focus, engagement, and knowledge retention. The microsimulation can be used as self-study prior to a class session, such as in a flipped classroom model, or in class to prime a rich discussion.
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