Raise or Lower the cost of Tuition
ECO204: Principles of Microeconomics (BBH1326A)
July 6, 2013
Assess a raise in tuition and if it will necessarily result in more revenue.
At Nobody State University, there would not be increase in revenue if there was an
increase in tuition.
It would have to decline some of the enrollment in order to have an increase
If they would increase the tuition it would decrease the revenue. Therefore Nobody
State University would not decrease the enrollment therefore, it would not increase the revenue
but it would increase the tuition that the students would pay to attend.
However, it is believed
that if the University collected tuition from families that can afford the tuition increase it would
remain constant since the enrollment would be the one that falls instead of the revenue.
in mind that the major goal of cost-related tuition is to increase tuition revenues without
dropping students. We define tuition elasticity as the adjustment in student enrollment is
triggered by the adjustment in tuition.
Describe the conditions under which revenue will (a) rise, (b) fall, or (c) remain the same.
The revenue would remain the same since we have tuition rising and students are
dropping out of college because of the elevation escalating cost to attend colleges.
those that are in college will grumble at the high cost of tuition therefore, paying the price to
“Demand curves illustrate price and quantity relationships. Quantity, or the number of
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