My eleven year old 5th grader informed me that he needed thirty cupcakes and 30 brownies to take to school to sell at "market" the following morning. Did I mention that it was already 7pm, and I was already anticipating getting to bed by 9pm. (this story may strike a cord with other parents out there with school-age kids). In my quest to "just get it done", I told him that he would probably have more brownies than cupcakes (I wasn't going to venture out to the grocery store at this late hour)....Moving forward in the story....we ended up with 37 brownies and 16 cupcakes...at 11pm.
I asked him how much he was going to sell the brownies for. He said $.50. I then asked what he was going to sell the cupcakes for. He said $.50. Seizing a "teachable moment", I launched into Supply and Demand and how it relates to pricing. Explaining that we had just witnessed the extreme of having too much Supply of houses without a high Demand, causing prices to sharply go down. As the Inventory of homes becomes smaller, prices generally go up.
The morale of the story: Do your homework and never underestimate the value of your cupcakes!
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