Lesson Plan

• Describe consumer and producer surplus and illustrate them on a demand‑supply diagram.
• Explain how the price elasticity of demand and supply affect the magnitude of surplus changes when prices rise or fall.
• Calculate changes in consumer and producer surplus using elasticity‑based formulas.
• Analyse welfare outcomes of a tax under different elasticity scenarios.
• Apply the concepts to answer exam‑style questions with appropriate diagrams.

• Projector or interactive whiteboard
• PowerPoint/Google Slides with diagrams and tables
• Printed worksheets containing surplus‑elasticity problems
• Graph paper, rulers, and calculators
• Handout of the comparative elasticity table

Begin with a headline about a new tax on sugary drinks and ask students how buyers and sellers might be affected. Recall the definitions of consumer and producer surplus from the previous lesson. State that by the end of class they will be able to predict and quantify these effects using elasticity concepts.

1. Do‑Now (5'): Quick quiz on surplus definitions on the board.
2. Mini‑lecture (10'): Review demand‑supply diagram and introduce price elasticity of demand and supply.
3. Guided practice (15'): Work through the numerical illustration (tax on Good X) together, calculating new quantity, CS loss, and PS change.
4. Group activity (15'): Teams analyse the comparative table, decide which scenario yields larger welfare losses/gains, and present findings.
5. Check for understanding (5'): Exit‑ticket – one sentence explaining why elasticity matters for surplus changes.
6. Homework briefing (5'): Assign a problem set requiring students to draw diagrams and compute surplus shifts for a different tax scenario.

Summarise that elastic markets experience larger quantity adjustments, leading to bigger changes in consumer and producer surplus, whereas inelastic markets show smaller adjustments. Collect the exit‑ticket responses to gauge understanding and remind students to complete the assigned problem set for next class.