Complete the simulation

Complete the following simulation and answer the questions below.

http://www.omsi.edu/exhibits/moneyville/activities/lemonade/lemonadestand.htm

• What factors affected demand for your product?

I chose to play with the medium level. I sold lemonade for 7 days. The primary factor that affected the demand for my product was weather and the price I set for each serving. For example if the weather was cold and I would charge $0.4, lemonade won’t sell in large quantities and I lost money on that day. But on a great sunny day, I sold out for the same price. So, it’s not just the price, but also the mood of the customers and the weather that decides how much I sold.

• What pricing strategies did you use?

For the first two days, I didn’t have a clear idea of what I am doing so the prices were kind of random. But then, I started to look at the newspaper and charged according to the weather and what was forecasted for the business. I have had my successful and then worst days.

• Describe your most successful day and you’re least successful? Why were they successful or unsuccessful?

My most successful day was when I sold 20 glasses and I make 4 dollars. On the least successful day, I lost 6 dollars. Weather and the price of each serving were the main factors in how the business went.

• What was your total # of cups sold at the end of the week?

At the end of the week, I sold out 83 cups, with total profit = -$0.95. I know I didn’t end up in profit but the loss was not that great either. For a practice, this exercise did teach me to think strategically while doing a business. I think that is the great outcome for me. Having said that, I would say that 7 days are not enough to judge a business. It would take a lot more than that to decide about the success or failure of a business.