Summer Fun: The Economics of the Lemonade Stand
Part
1: Wanting Things
When
it's really hot outside, you often want to stay cool. What
are your options? Sit under a tree? Sounds cool. Go swimming
or play under a hose? Equally cool. Sit in front of a fan or
an air conditioner? Now that's a COOL idea. But unless
you're swimming or playing in the water, you're probably
sitting still, trying to minimize your heat production. You
don't want to move too fast or too much for fear of getting
even hotter.
So
how do you spend your time? Reading a book? There's a way to
learn. Watching TV? Yes, you're sitting still there. How
about playing a video game? You're probably sitting still
there, too.
Summer
is also a time when we want things. Big, exciting
summer movies come out, and we want the latest books or
action figures that go with those movies. Or, we want to go
see those movies. Sony or other video-game makers release
the latest games for their consoles. We want those latest
games.
All
these things require money. Where do we get it? Chances are,
someone at your age doesn't have a lot of it. (If you do,
then you can still appreciate the possibilities that
follow.) You could earn money in the summertime by
babysitting or mowing lawns or helping with cleanup. You
could also operate a lemonade stand.
You
set up shop on a sidewalk or in front of a house or
business. You have at least one pitcher of ice-cold
lemonade, and you're offering it to anyone who walks by--for
a very low price. You most likely got the lemonade from
someone in your family, so you don't really have any costs.
So, everything you make is pure profit. If you sell
your lemonade for 10 cents a glass, then you need to sell
only 10 glasses to make a dollar. Sell about 50 glasses and
you'll have enough to see that cool new summer movie or buy
that great new book or video game.
But
what about that 10 cents you're charging? Could it be more?
You might charge 50 cents a glass. You might also end up
like the boy in the graphic at right: He's very sad because
no one is buying his lemonade. Why? He's charging too
much.
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