Unformatted text preview: l increase demand, thereby improving overall occupancy rates, and that the resulting increase in occupancy rates will, in turn, boost revenues for the campus. This reasoning is unconvincing for several reasons. To begin with, the author assumes that boosting occupancy rates will improve revenues. All other factors remaining unchanged, this would be the case. However, the author proposes reducing both the supply of units and their rental prices. Both of these actions would tend to reduce revenues. The author provides no evidence that the revenueenhancing effect of a higher occupancy rate will exceed the revenuedecreasing effect of reduced supply and price. Without such evidence, the argument is unconvincing. Secondly, the author assumes that lowering rents will lead to higher revenues by increasing demand. However, it is possible that demand would decrease, depending on the extent of the rent reduction as well as other factors—such as overall enrollment and the supply and relative cost of...
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This note was uploaded on 05/05/2009 for the course ECAS asdfasdf taught by Professor Asdfaf during the Spring '09 term at Academy of Art University.
- Spring '09