If Stimpson University increases tuition in order to increase its revenue, it will:
A) not be successful if the demand curve slopes downward.
B) be successful if demand is elastic.
C) be successful if demand is inelastic.
D) be successful if supply is elastic.

Question

Quizplus · Accepted Answer

If demand for Stimpson University's education is inelastic, then increasing tuition will not significantly decrease the number of students attending. As a result, the university can increase revenue by increasing tuition. However, if demand is elastic, increasing tuition will result in a significant decrease in the number of students attending, and the university may actually see a decrease in revenue. Supply elasticity is not directly relevant to the impact of tuition increases on revenue.

If Stimpson University Increases Tuition in Order to Increase Its