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Lesson plan · Entrepreneurship · Lesson 4

Pricing

Cost-based, value-based, and competitor-based pricing.

  • 45 minutes
  • Grades 9–12
  • Beginner
  • Activity: pairs
Present slidesWorksheet + keyStudent lesson

Objectives

Students will be able to:

  • Compare cost-based, value-based, and competitor-based pricing
  • Explain cost as the price floor and value as the ceiling
  • Use options to capture different customers' willingness to pay

Materials

  • Slide deck and a projector
  • Worksheet (one per student)
  • Exit ticket slips (bottom of the worksheet)

45-minute agenda

  1. 0–5 min

    Warm-up

    Post: “Your cookies cost $0.50 each to make. What would you charge at school? At a stadium? Why the difference?”

    Teacher note: Same cost, different value to the customer. Price is set by value, with cost as the floor.

  2. 5–17 min

    Direct instruction

    Present the lesson slides. Make sure students leave with these points:

    • Cost = floor. Value = ceiling.
    • Value-based pricing is usually most profitable.
    • Underpricing is a common founder mistake.
    • Options (premium, rush, bundles) let customers pay for what they value.

    Use the “See it” slide (Three ways to set a price) to make the idea visual.

  3. 17–22 min

    Worked example

    Walk through “Marcus sets a price” on the slides. Pause before the result and ask students to predict it.

  4. 22–32 min

    Price It

    Format: pairs · 10 minutes

    1. Product: a custom-designed phone case. It costs $6 to make. Similar plain cases sell for about $20.
    2. Pairs set three prices: cost-plus (50% markup), competitor-based, and value-based.
    3. Pairs add one premium option (like rush delivery or a second design) and price it.
    4. Pairs choose their final price and defend it in two sentences.

    What to look for: Cost-plus: $9. Competitor: about $18–$22. Value-based: often $25 or more for a custom design, with a rush option around $30.

  5. 32–37 min

    Check for understanding

    Use the question slides — or run them as a Four Corners game. Answers:

    1. What happens as you sell more? — B. You lose $1 on every sale, so more sales mean bigger losses.
    2. What usually sets the ceiling on what you can charge? — C. How much the solution is worth to customers
    3. Charging very low prices is always the best way for a new business to succeed. — False
  6. 37–42 min

    Discussion

    • Think of something you paid more for than it cost to make. Why was it worth it to you?
    • Why is it hard to raise prices after launching?
  7. 42–45 min

    Exit ticket

    Prompt: Fill in: Cost is the ___ for a price; value is the ___.

    Answer: floor; ceiling.

Differentiation

Common misconception

“The cheapest price wins.” Many customers pay more for quality, convenience, or a trusted brand.

Support

Provide a pricing worksheet with the three methods laid out as steps.

Extension

Survey ten people about the most they'd pay for the phone case, and compare with your price.

Homework or make-up work

Students can complete the full interactive lesson — including its knowledge check — at learnwithflc.org/courses/entrepreneurship/pricing. No account needed; progress saves on their device.