2.4 The Power of Price

2.4 The Power of Price

• How do economic producers measure their production parameters and evaluate how they will meet consumer demands and return a profit.
• Who is currently marketing to teenagers and how do they ascertain, quantify, and exploit the unique vulnerabilities of this demographic?
• What is price and how did become such an important metric in modern society.

Price is a very powerful force in the development of human institutions. The level of resources that must be sacrificed in order to obtain something that we want has been a defining aspect of humanity for recorded history. Today, using modern scholarship and research techniques, price has become a scientific subject with legions of economists searching through data to determine the best way to exploit opportunities.

Cost of Living- One of the key elements that makes price an important factor is the comparative quality of life that is possible in different regions depending on the competition for goods and services. Follow the cost of living link to evaluate the relative costs of living in different major cities.

What are the specific inputs for gasoline prices? This is an interesting video lecture from the Khan Academy about the cost of producing gasoline and an explanation of why the price structure of gas is volatile.

Gas Buddy Activity- Go to the link for Gas Buddy a site that tracks the prices of gasoline all over the country. Create a graph that compares the prices of gasoline in three locations and provide a summary of how the prices are related and the possible reasons that they differ. Please print a copy and hand it in for credit.

Creating Demand-Marketing to Teens

Considering the prices of commodities and simple consumer items is a complex and dizzying complicated exercise. However, it is the consumer economy for "must have" items that is actually driven by factors that may be even more complex. Please examine the graph and brief explanation of the difference between food prices and finished consumer goods. Then you will read this short article about marketing to teens.

Creating demand is critical when you market products in a crowded field or when you market products that people must be convinced to use or consume. Two industries specialize in using youth or teen marketing to build allegiance to products that are actually very unhealthy. Please take these two quizzes to examine the marketing details and campaigns targeted at you and people younger than you.

Marlboro Teen

Junk Food Marketing

Together we will watch a Frontline documentary that highlights the factors that allow producers to DRIVE demand and create more customers for the products that they make OR make products that they know targeted consumers will want to buy.

Generation Like

Finally, visit my discussion page and address the following prompt: What are the strategies that marketers use to get young customers? What should be their ethical and responsible limits on how they try to draw customers to their products?

• Economics Textbook-Free!! (PDF 15.09 MB)Use this to do an introductory reading on economics.
• MIT Microceconoics Introduction
• This free and exceptional course is being offered by MIT to expand the accessibility of higher learning to the general public. We will be doing a brief reading and watching some short lectures to familiarize ourselves with some macroeconomic concepts.
• The Merchants of Cool
• Frontline documentary that charts the market research, economic planning, and business models that are focused on teen consumption and some would say exploitation.
• Electronics vs. Food Price Comparison
• Why are food prices more volatile than the price of consumer electronics?
• Excerpt from FAST FOOD NATION
• When you visit this link you will need to pull down to the section labelled KID KUSTOMERS. It is halfway down the page. Read the excerpt after you have taken the quizes.