US High School Economics class. Diamonds to detergent: weary consumers brace for more price rises

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In this activity, you will explore how tariffs and inflation are affecting the prices of everyday products (from cereal to luxury goods) and how companies and consumers are responding. You’ll analyse the concept of price elasticity of demand to understand why some prices rise more than others and how sensitive people are to those changes. By the end, you’ll be able to explain why certain goods are considered elastic or inelastic and how that shapes business decisions in a changing economy.

Essential Question: How do tariffs and consumer behaviour influence the prices we pay for everyday goods, and what determines whether people keep buying when prices rise?

Read the FT article and then answer the questions below:

Diamonds to detergent: weary consumers brace for more price rises

Reading Questions: 

• What is the main economic reason that companies like Procter & Gamble and Sony say they are raising prices?

• Why might consumers be less willing to accept price increases today than in the past?

• How have luxury brands responded to the tariffs, and what does this reveal about demand for luxury goods?

• Why might the price increases in the US be higher than in other countries for the same products?

• What are some signs that consumers may be reaching a “breaking point” on prices?

• What happened to Kellogg’s sales when they raised cereal prices, and what concept does this illustrate?

• How is Walmart responding to price increases from suppliers, and why?

• What strategy might large multinationals like Nestlé use when deciding where to raise prices?

• According to the EY consumer survey, which products are shoppers most likely to cut back on?

• Why might concerns about global price increases be overstated, according to DZ Bank’s analyst?

Joel Miller and James Redelsheimer, Foundation for Economic Education.
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