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." How much profit (or loss)will the college make on the course if it charges this price?

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." How much profit (or loss)will the college make on the course if it charges this price?

Quizplus · Accepted Answer

If the college charges a price that just breaks even, it will charge $9 per student. At this price, the college will have 240,000 students enrolled, resulting in total revenue of $2,160,000 (240,000 x $9). The total cost at this level of enrollment is also $2,160,000, resulting in a profit of $0 (revenue - cost = $2,160,000 - $2,160,000 = $0). Therefore, the college will neither make a profit nor a loss.

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