If the administration raises tuition on our campus in order to increase 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
E)be successful if supply is inelastic

Question

Quizplus · Accepted Answer

If demand is inelastic, it means that students are not very responsive to a change in price and will still enroll even if tuition is increased. In this case, raising tuition would lead to an increase in revenue for the administration. However, if demand is elastic, students are very sensitive to changes in price and may choose to attend a different, more affordable university if tuition is raised, leading to a decrease in revenue. Thus, option C is the correct choice.

If the Administration Raises Tuition on Our Campus in Order