Beaming DOUGHNUT DREAMING-LESSON 8 SPE LESSON B-DOUGHNUT DREAMING ACTIVITY 8.3 ASSESSMENT: POWER PENCILS Directions: An inventor has created a Power Pencil and wants your help to fig- ure out how much to charge for it. Use the demand schedule on the next page to create a line graph for the inventor, showing the demand for the new pencils. 1. Label the horizontal axis of the graph on the next page "Quantity of Pencils Demanded." Label the lines on the horizontal axis by tens from 0 to 100. 2. Label the vertical axis "Price of Pencils." Label the lines on the vertical axis by units of $0.10 from $0 to $1.00. 3. Plot the data points from the demand schedule on the next page on the graph and connect the points with a line. 4. Label the graph "A Demand Graph for Power Pencils." 5. Answer the following questions: A. How many Power Pencils did people want to buy at $0.70? How many more did people want to buy at $0.50 than at $0.70? B. How many Power Pencils do you think people would want to buy if the pencils were $1.50 each? How many do you think people would want to buy if the pencils were $0.05 each? C. Define demand. refers to the Willingness and ability of consumers to Purchase a particular Product. D. How does the graph illustrate the law of demand? It shows the inverse relationship between the price and quantity demanded. E. What advice will you give the inventor about the price for a Power Pencil? Would consider finding a balance between maximizing Profit and ensuring a reasonable quantity 118 MATHEMATICS AND ECONOMICS: CONNECTIONS FOR LIFE, NATIONAL COUNCIL ON ECONOMIC EDUCATION, NEW YORK, N.Y.