Lesson plan · Entrepreneurship · Lesson 4
Pricing
Cost-based, value-based, and competitor-based pricing.
- 45 minutes
- Grades 9–12
- Beginner
- Activity: pairs
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)
Standards
- National Standards for Personal Financial Education (2021)
- Earning Income
- Texas TEKS §113.76 Personal Financial Literacy and Economics
- (1) The student understands the fundamental concepts of economics.
- (5) The student discusses the opportunities available for entrepreneurship.
Topic-level alignment by FLC. How we map standards
Background reading
The official sources this lesson is based on.
- Plan your business (opens in a new tab) · sba.gov
- Manage your business (opens in a new tab) · sba.gov
45-minute agenda
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.
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.
17–22 min
Worked example
Walk through “Marcus sets a price” on the slides. Pause before the result and ask students to predict it.
22–32 min
Price It
Format: pairs · 10 minutes
- Product: a custom-designed phone case. It costs $6 to make. Similar plain cases sell for about $20.
- Pairs set three prices: cost-plus (50% markup), competitor-based, and value-based.
- Pairs add one premium option (like rush delivery or a second design) and price it.
- 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.
32–37 min
Check for understanding
Use the question slides — or run them as a Four Corners game. Questions:
- What happens as you sell more?
- What usually sets the ceiling on what you can charge?
- Charging very low prices is always the best way for a new business to succeed.
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?
42–45 min
Exit ticket
Prompt: Fill in: Cost is the ___ for a price; value is the ___.
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.