Get Smart University is contemplating an increase in tuition to enhance revenue. If GSU feels that raising tuition would enhance revenue, it is
A) ignoring the law of demand.
B) assuming that the demand for university education is elastic.
C) assuming that the demand for university education is inelastic.
D) assuming that the supply of university education is elastid.

Question

Quizplus · Accepted Answer

The assumption that raising tuition will enhance revenue suggests that GSU believes the demand for university education is inelastic, meaning that students are willing to pay higher prices to attend GSU, regardless of the increase in tuition. This assumption is based on the belief that there are few alternative education options or substitutes for attending GSU, and that the benefits and prestige of a GSU education outweigh the costs for students.

Get Smart University Is Contemplating an Increase in Tuition to Enhance