(Consider This) Which of the following best explains the significant increases in the equilibrium prices for higher education in the United States since the 1980s?
A) The demand for higher education is highly price inelastic, and the supply has decreased substantially.
B) The demand for higher education is highly price elastic, and the supply has decreased substantially.
C) The supply of higher education is highly price inelastic, and demand has increased substantially.
D) The supply of higher education is highly price elastic, and demand has increased substantially.

Question

Quizplus · Accepted Answer

The supply of higher education is highly price inelastic, and demand has increased substantially. This is because the supply of higher education is constrained by factors such as limited physical capacity of universities, and high costs of hiring and retaining qualified faculty. At the same time, the demand for higher education has increased due to factors such as the need for specialized skills in the labor market and a perception of higher education as a requirement for social mobility. This combination of highly inelastic supply and increased demand has led to significant increases in the equilibrium prices for higher education in the United States since the 1980s.

(Consider This) Which of the Following Best Explains the Significant