Recently in humanities we have started a mini economics unit, we made a plan for the summer to make money, spend money or save money. I chose to create a plan which I would make money from although I chose a question which is not based on making money, it is based on part of my culture which is English. Here is my question:
What would be the equilibrium point of a lemonade stand in a local English town?
Why is this my question: The reason why I chose this question is because I go back to England every year and I travel across the country. I want to see how the equilibrium point of a Lemonade stand changes as I travel across England. Also I want to see the demand for Lemonade stands across England depending on the time of day and the weather and then I can notice the supply (how many lemonade stands are set up). Another reason why I wish to do this is because setting up a lemonade stand is a very traditional way of children to make money in England and recently they have been quite scarce because of allowances and also there are a lot of restaurants that provide lemonade which is mass produced. An example of mass produced lemonade is Sprite and 7 UP.
I need to find out how much I need to pay in order to make profit and then from there I can make money from doing chores and also I have a lot of saved up money from Christmas and Birthdays.
The currency I will be using is British pounds, this is because it is the only currency that is used by everyone in England and also it is one of the strongest and most famous currencies in the world other than US dollars. The exchange rate for each pound is around about 161 Japanese Yen although when I exchange it back to Japanese Yen I could lose some money to companies that exchange money from one currency to another. This is because they need to make a profit themselves in order to stay in business and to keep from going corrupt/bankrupt. This means that they run out of money and there is no longer a demand for their product but they keep supplying so they start to lose money rapidly.
In order for me to make money there will be very little labour required on my half of the market because I have money stored up and as long as I don’t give in to the different opportunity costs I will have enough money to at least start up a lemonade stand. Although I will have to give up time with my family and friends in order to make the most amount of profit because if you put in the effort you can achieve a high level of whatever you are doing. But there will be labour for the producers because in order for me to make lemonade they have to provide the resources.
There will be a few different opportunity costs for me as I like to have a nice ice cream when it’s a hot day in England and I will also have to take public transportation at times because it is more affordable and it is more eco-friendly. I will have to resist buying different products and also I will have to resist playing soccer with my friends and family because a lot of the time in England I am out and about with friends and family having fun but in order to have the most amount of time and money to carry out my plan I must give up time with my family and friends.
What will be the outcome?
I think that my plan will be very successful because every year when I go back to England a lot of the adults I see, talk about how much they miss lemonade stands because nowhere days most kids will stay inside and play videogames but I think that a lot of kids should go outside and experience a big part of english culture. This will show kids that they can have fun and make money without having to be indoors. Although this is an investment if people study the market they can make a large amount of money from a simple thing like a lemonade stand. I think that the equilibrium point of a lemonade stand in England would be quite high because from what i’ve heard so far people are willing to buy lemonade if it is available, but right now in a lot of England it’s not and that means no competition which means higher profit.
How much will it cost to make lemonade?
64 tablespoons of sugar = 1kg
one tablespoon = 15.625g
58 grams = 1 lemon
3.712 tablespoons = are in 1 lemon
1 bag of sugar=
32 cups of lemonade
91 pence for 1 lemon
£29.71= 32 cups of lemonade
I will most likely have to make around 70 cups of lemonade per place in England that I travel to, so I will have to spend around 60 pounds for the materials to make lemonade so I can meet the demand and this will help me figure out the equilibrium point of a lemonade stand. I will then use the money that I make from the previous Lemonade stand to use to set up the lemonade stand in the next location.
“Google.” Google. N.p., n.d. Web. 30 May 2016. <https://www.google.co.jp/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=a%20dollar%20to%20pound-8#q=a%20dollar%20to%20pound>.
“How Much Does a Average Lemon and Orange Weigh in Grams, Approximately.” Questions & Answers. N.p., n.d. Web. 30 May 2016. <http://www.chacha.com/question/how-much-does-a-average-lemon-and-orange-weigh-in-grams,-approximately>.
“Google.” Google. N.p., n.d. Web. 30 May 2016. <https://www.google.co.jp/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=how%20many%20tablespoons%20are%20in%20a%20kg>.
Tesco. White Sugar. N.p., n.d. Web. 30 May 2016. <http://www.mysupermarket.co.uk/grocery-categories/White_Sugar_in_Tesco.html>.
“Produce Price List.” : Park Slope Food Coop. N.p., n.d. Web. 30 May 2016. <https://www.foodcoop.com/produce>.
My plan is to find the average equilibrium point of a lemonade stand in a local town in England. The reason why I chose to do it in England is because most people speak english there and also there will be a lot of familiar faces around which will build up my confidence. For my plan there will be a lot of opportunity costs because I have to give up a lot of my time and I have to go out and buy materials, also I will have to stand out by my lemonade stand for the day and resist going to the park with my friends and family in order to make the most amount of profit. My plan will really encourage a lot of children in England to set up cost beneficial activities or stands because a lot of children have forgotten how people used to make money on a hot summers day, also a lot of children are saving up to buy toys and video games. Also it might encourage allowances in England because kids don’t usually earn money from doing chores, they have to make it themselves by setting up fundraisers and activities and they need to save up for things they want but they need money to set up the lemonade stand and unless they have been saving up, they will need a source of income. The currency I will be using is Great British pounds as this is the most common form of currency currently in England. My plan is also a short term investment because you have to take a risk with your money to make profit but you can still make a loss if the demand for lemonade is too low and the supply is too high, this is what would cause a big company to go bankrupt but because lemonade stands are easy to set up you would not lose too much money. The reason I chose this question is because Lemonade stands are a big part of english culture, and they have started to die off because of video games and other indoor activities. In England currently a lot of kids spend most of their time off school in their house and lemonade stands are a good way to get out of the house and enjoy the sunshine. Also a lot of children find it hard to make money because of opportunity costs, Kids can’t resist buying the new coolest toys/video games and this will teach them how to set up a successful business even though it is a local lemonade stand.
I think that I will do my plan but I will do it with some friends or someone from my family because it will be a great way to socialise and learn about making money and profits and how to prevent a business from going bankrupt and making a loss. I love to stay outside during summer and I really want to bring back a part of English culture. I have the funds to set up a Lemonade stand and it would be great fun, that is why I think that I should set up a Lemonade stand in England.