Pricing is one of the most powerful forces influencing consumer demand. Whether a product is considered a necessity or a luxury often depends on how price-sensitive consumers are to changes in cost. This project challenges students to test real-world price sensitivity through an experiment that examines how price changes affect consumer purchasing decisions.

Students will select a product or service and design an experiment to measure how different price points influence demand. This could involve conducting surveys, observing consumer behavior in stores, or simulating a marketplace where participants "purchase" goods under changing price conditions. The goal is to analyze whether the product exhibits elastic or inelastic demand—meaning, does a price increase significantly reduce purchases, or do consumers continue buying regardless of cost?

To develop their experiment, students should consider the determinants of demand—including consumer income, the availability of substitutes, and the perceived necessity of the product. If a product has few substitutes, demand might remain strong even at higher prices, while products with many alternatives may see a sharp drop in demand. Real-world examples, such as how gas prices affect commuting habits or how luxury brands maintain high demand despite price hikes, should be used to strengthen the analysis.

After collecting data, students will interpret their findings by applying demand theories. They should analyze consumer reactions, explain what their results suggest about price elasticity, and discuss real-world implications for businesses setting prices. Finally, students will compile their results into a structured experiment report, using graphs, tables, or case studies to support their conclusions. This project will provide insight into how businesses, policymakers, and consumers interact within the economy and how pricing strategies can shape entire industries.