Suppose the president of a college argues that a 25 percent tuition increase will raise revenues for the college. It can be concluded that the president thinks that demand to attend this college is:
A) elastic.
B) inelastic, but not perfectly inelastic.
C) unitary elastic.
D) perfectly elastic.

Question

Quizplus · Accepted Answer

The president believes that a 25 percent increase in tuition will raise revenues, indicating the belief that the quantity of students attending will not decrease enough to offset the higher price. This suggests the demand is inelastic (students' demand for attending the college is relatively insensitive to price changes), but not perfectly inelastic (which would mean demand does not change at all with price changes).

Suppose the President of a College Argues That a 25