A university administration's decision to raise tuition in order to increase revenue will be successful if _____
A)the demand curve slopes downward.
B)demand is elastic.
C)demand is inelastic.
D)supply is elastic.
E)supply is inelastic.

Question

Quizplus · Accepted Answer

If demand for education is inelastic, students will continue to pay higher tuition prices regardless of the increase. This means that the university can increase revenue without losing a significant number of students. If the demand were elastic, meaning that students would be more sensitive to changes in tuition prices and would be more likely to seek alternative options, then raising tuition would not necessarily increase revenue.

A University Administration's Decision to Raise Tuition in Order to Increase