Get Smart University is contemplating increasing tuition to increase revenue.What must the school believe
A)The supply of university education is inelastic.
B)The demand for university education is elastic.
C)The demand for university education is inelastic.
D)The supply of university education is elastic.

Question

Quizplus · Accepted Answer

If the school is contemplating increasing tuition to increase revenue, they must believe that the demand for university education is inelastic. This means that students are not very sensitive to changes in price and are still willing to pay a higher tuition to attend the university. If the demand were elastic, the increase in tuition would lead to a decrease in the number of students attending, resulting in a decrease in revenue.

Get Smart University Is Contemplating Increasing Tuition to Increase Revenue