This is a complete lesson plan about calculating revenue, maximizing profit, and determining when a business may shut down in the short run or the long run. It emphasizes the use of the optimal output rule (MC = MR), and it illustrates the relationship between price and average cost curves in perfectly competitive markets. (It pairs nicely with my lesson plan on Business Costs
, and it is also part of a larger unit on Market Structure
THIS DOWNLOAD INCLUDES:
1) Warm Up Activity -- simulation that illustrates why producers sell where MC = MR.
2) PowerPoint Presentation -- contains the lecture and is a guide for all activities.
3) Note Sheet -- students fill out this note sheet during the lecture.
4) Class Activity -- students calculate costs, revenue, and profit.
5) Homework -- students determine whether a firm should shut down production or not.
6) Teacher Materials -- includes a detailed lesson plan, answer keys, and a "Read Me" document explaining how to use the materials included.
TOPICS FOR THE LECTURE:
1) Total Revenue, Average Revenue, Marginal Revenue, and Profit
2) Optimal output rule, which states production should occur where MC = MR
3) Graphing a firm that is making a profit
4) Graphing a firm that is incurring a loss
5) Why a firm may shut down production in the short run
6) Why a firm may shut down production in the long run
(If you would like to download one of my PowerPoint slideshows to get a feel for my style, check out my free download here
This lesson is the third day of a seven-day unit on Market Structure
that was designed using national standards from the Council for Economic Education. It should take 80 - 90 minutes, which is perfect for the block schedule, but it can also be easily split in half for classes that run closer to 50 minutes.
Revenue and Profit - Lesson Plan and Activities
by Nick Samsal
is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License