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Unformatted text preview: The quantity demanded is greater than the quantity supplied by 30,000, meaning 30,000 students won’ t get into college. This is a shortage. b. There will be low quality because of low tuition, leaving less money for the college. Inefficient Allocation will occur since low price will attract many people and black market since low tuition forces colleges to make ends meet (bribe for more money to get a spot). Students also waste time and effort to get into college, wasted resources. c. Students will be better off because tuition will return to an equilibrium and they also have grants from the government. State colleges will also be better off because the demand will return to normal and will have enough money, and their resources won’t be wasted....
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This note was uploaded on 09/24/2011 for the course ECON 32342 taught by Professor Macst during the Spring '11 term at Delaware Tech.
- Spring '11
- Supply And Demand