Supply and demand is an abstract concept. Many third-graders have a hard time grasping that concept unless it is taught to them in a way that they can relate to. The key to teaching supply and demand is the ability to take the concept and apply it to things that third-graders understand.

Skittles & Candy Bars

Candy is a way to teach supply and demand. Choose several candies for this exercise, such as candy canes, Skittles and M&Ms, and separate them individually. You will want to get somewhere between one and three king-size candy bars.

Present all of the candy to students. Show that you have lots and lots of Skittles and M&Ms and that you have a small number of candy bars. Ask the students which they think is easier to acquire--the little candies or the candy bars. Then, ask the students what they think they would have to do to get the candy bars. Award the students as you choose, perhaps based on academic performance, tasks the students do that day or points the students have been saving up all year. Use this point to illustrate how in the "grown-up world" things that are "bigger" like candy bars cost more than little things and that we have to save up for them.

Fake Money

For this exercise, give each student the same amount of money, and select items that they can buy. Have pencils, erasers, calenders and other academic materials that students need. Limit some items to only one or two that the students must spend all of their points on to acquire. Convey to the students that certain items have a higher price because there are fewer of them while others cost less because there are more. You can also overprice certain items or have things for sale that they would have no interest in such as paper clips. Ask afterward why no one wanted to buy a paper clip. Explain that there was no demand for paper clips or whatever item you use to choose to extrapolate your point.


An auction is perhaps the most effective way to demonstrate supply and demand since the students set the prices for the items. Like the example above, give each student a set amount of money. Have certain items be more common such as pencils, and then have less common items such as stickers. Have the students bid on the items. Mark on the board how much each item ended at and then go into a discussion afterward as to why the items went for the prices that they did.