Figure 10-17
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 10-17.An economics professor argues: "I think the course should be priced so as to achieve economic efficiency." How much profit (or loss)will the college make on the course if it charges this price?

Question

Figure 10-17
  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 10-17.An economics professor argues: "I think the course should be priced so as to achieve economic efficiency." How much profit (or loss)will the college make on the course if it charges this price?

Quizplus · Accepted Answer

Economic efficiency is achieved when price equals marginal cost. If the course is priced at this level, the college will incur a loss of $1,080,000, as indicated by the cost structure in Figure 10-17.

Figure 10-17 Your College Decides to Offer a Psychology Course