Stamps to go up by 3p - Price elasticity of demand

The Royal Mail has decided to increase the price of first class stamps by 3p due to a huge hole in their finances. They are hoping the proposal will rake in an extra £100 million pounds a year. Whether this tactic is successful depends on the price elasticity of demand for the stamp. Consumer Focus believe the new prices would drive away customers meaning demand would be price elastic where as the Royal Mail obviously believe demand is price inelastic as they expect to increase revenue with the price change. Click read more for some questions on PED that would suit both GCSE and A level students.

Demand and Supply in action - fall in demand for apples

Consumption of apples has fallen by 3.2% in the last year, despite Government guidelines stating we need to have our five a day.

Would you have your hair cut in a layby?

‘Ben the Barber’ has set up in a lay by on the A6 near Luton. Having been a hairdresser in a conventional shop he found the overheads getting larger and larger and was struggling to cope. As this video shows he bought a mobile shop and eventually his business has grown.

Cash for gold

If, like me, you found yourself watching far too much daytime TV over the holidays, you may have noticed advert after advert imploring you to send your unwanted gold (even teeth!) to a company in return for cash. Interest in companies like this has soared during the recession as people struggle to cope. H. Samuel has just entered the market, hoping their recognised brand name will entice customers. Can any of your pupils think of other industries which will do well during a recession?

Mnemonic Monday - price elasticity of demand and total revenue

Today we are going to look at the relationship between price elasticity of demand and total revenue. For GCSE (and A Level) students it is sometimes difficult to remember what a business must do to price in order to increase total revenue.

Are we ready for Wimbledon?

As the start of Wimbledon approaches not only will we be thinking of watching great tennis but also eating strawberries and cream (complementary goods).

Super Starter Sunday - Play your cards right

This might take a little preparation but will get your students thinking at the beginning of the lesson and if used regularly may encourage them to keep up to date with economic figures.

Super Starter Sunday – Economics in the news (14 June 2009)

This week’s economics in the news covers unemployment, oil prices, protectionism, and the end of the recession. The pupils have to guess the news stories using the pictures. Each picture has an explanation and web link behind it. 

Mnemonic Monday – Price elasticity of supply

This week’s mnemonic is for factors affecting price elasticity of supply