A community college charges lower tuition fees to town residents than to nonresidents. This pricing strategy increases the profits of the community college. Using this information, we can conclude that nonresidents must have a _____ demand for attending the community college than residents.

Question

Quizplus · Accepted Answer

Nonresidents must have a less price-elastic demand because the college can charge them higher tuition without significantly reducing their enrollment, thus increasing profits.

A Community College Charges Lower Tuition Fees to Town Residents