From Firms' Choice to Market Supply: Making the Connection Through a Competitive Market Experiment with Cost Cards

Abstract

Active learning allows educators to engage students in the learning process, making the material clearer and more memorable.  To promote active learning in an introductory economics class, this paper presents an interactive classroom experiment in which students role-play as firms in a competitive market to make the connection between a firm's profit maximization and market supply.  In addition to improving engagement, by reinforcing main ideas from various chapters (market structures, supply and demand, and firms' choices), this activity helps students develop a sound, less fragmented understanding of the related topics, whereas the collaborative component of the activity enables students to enhance understanding through collective decision-making.