Raise or Lower the cost of Tuition Anna Youngs ECO204: Principles of Microeconomics (BBH1326A) Instructor: Sean Bedard-Parker 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 in revenue. 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. Bearing 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. However, those that are in college will grumble at the high cost of tuition therefore, paying the price to attend college. “Demand curves illustrate price and quantity relationships. Quantity, or the number of
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