Figure 15-17

Your college decides to offer a psychology course as a MOOC that can be taken by students anywhere in the world, whether they are actually enrolled in your college or not. The demand and cost situation for the MOOC is shown in the figure.
-Refer to Figure 15-17.You are a member of a student government and are asked to recommend a price for the course and you argue: "I think the college should charge a price so that it just breaks even on the course." What price should you recommend?

Question

Figure 15-17
  
Your college decides to offer a psychology course as a MOOC that can be taken by students anywhere in the world, whether they are actually enrolled in your college or not. The demand and cost situation for the MOOC is shown in the figure.
-Refer to Figure 15-17.You are a member of a student government and are asked to recommend a price for the course and you argue: "I think the college should charge a price so that it just breaks even on the course." What price should you recommend?

Quizplus · Accepted Answer

The break-even point is where the total cost curve intersects with the total revenue curve, which is at a quantity of 2,000 in this case. At that point, the price is $88. Charging a lower price would result in a loss for the college, while charging a higher price would result in a surplus. Thus, charging $88 would ensure that the college covers its costs without pricing the course too high.

Figure 15-17 Your College Decides to Offer a Psychology Course as a a Psychology