A public university knows that demand from potential students is elastic.If the university wants to increase tuition revenue,it should
A)raise its tuition rate
B)hold its tuition rate constant and increase faculty salaries
C)increase its financial aid
D)lower its tuition rate
E)increase its enrollment

Question

Quizplus · Accepted Answer

When demand is elastic, lowering the price (tuition rate) will lead to a proportionally larger increase in quantity demanded (enrollment), thus increasing total revenue.

A Public University Knows That Demand from Potential Students Is