Raise or Lower Tuition
- Submitted by: franceslynch2014
- Views: 556
- Category: Other
- Date Submitted: 05/12/2014 08:12 AM
- Pages: 5
- Report this Essay
Raise or Lower Tuition
Jane Doe
ECO 204: Principles of Microeconomics
January 23, 2014
Raise or Lower Tuition
Price elasticity plays a big role in determining how an increase in tuition for students would affect the total revenue at Nobody State University. The question is whether the increase in the fees would cause the revenue to increase, decrease or remain the same? To answer that, it would depend on whether the demand is inelastic or elastic. Price elasticity of demand measures the degree of responsiveness in quality demanded of an item due to a price change. In this paper, information will be provided to support if Nobody’s State University tuition should be raised or lowered.
After carefully reviewing NSU’s tuition fees, the question lies in whether to raise more revenue at Nobody’s State University which may cause a massive increase in tuition for the students. However, if one increases, the other one would definitely decrease. According to Johnstone (2004), “The rise in tuition has been driven by a number of factors, including a pervasive trend in the use of cost offsetting in higher education and real and even nominal declines in appropriations due to state revenue shortfalls.” In this case, Nobody’s State University would more than likely decrease some enrollments in order to increase the revenue. The chances are unlikely for that the university will even consider such move because it would cause a huge increase in tuition.
Under what conditions will the revenue (a) rise, (b) fall, or (c) remain the exact same is another concern for Nobody’s State University. Revenue definitely will not fall or remain the same because of the economy. According to Curs (2010), “revenue is increased when price is set so that the price elasticity is exactly one.” Even though tuition has risen in the past, economic crisis continues to rise. This will make it very difficult for students that are depending on governmental funds to attend college because of the...
Jane Doe
ECO 204: Principles of Microeconomics
January 23, 2014
Raise or Lower Tuition
Price elasticity plays a big role in determining how an increase in tuition for students would affect the total revenue at Nobody State University. The question is whether the increase in the fees would cause the revenue to increase, decrease or remain the same? To answer that, it would depend on whether the demand is inelastic or elastic. Price elasticity of demand measures the degree of responsiveness in quality demanded of an item due to a price change. In this paper, information will be provided to support if Nobody’s State University tuition should be raised or lowered.
After carefully reviewing NSU’s tuition fees, the question lies in whether to raise more revenue at Nobody’s State University which may cause a massive increase in tuition for the students. However, if one increases, the other one would definitely decrease. According to Johnstone (2004), “The rise in tuition has been driven by a number of factors, including a pervasive trend in the use of cost offsetting in higher education and real and even nominal declines in appropriations due to state revenue shortfalls.” In this case, Nobody’s State University would more than likely decrease some enrollments in order to increase the revenue. The chances are unlikely for that the university will even consider such move because it would cause a huge increase in tuition.
Under what conditions will the revenue (a) rise, (b) fall, or (c) remain the exact same is another concern for Nobody’s State University. Revenue definitely will not fall or remain the same because of the economy. According to Curs (2010), “revenue is increased when price is set so that the price elasticity is exactly one.” Even though tuition has risen in the past, economic crisis continues to rise. This will make it very difficult for students that are depending on governmental funds to attend college because of the...