Merit scholarships not only allow universities to attract the most talented students, but to also practice price discrimination since meritorious students:
A) have many substitutes for attendance at any particular college.
B) can easily arbitrage their education.
C) do not have to submit their parents' tax returns to the financial aid office.
D) have highly inelastic demand for going to college.

Question

Quizplus · Accepted Answer

Meritorious students often have multiple offers from different universities, allowing them to choose among substitutes, which enables universities to practice price discrimination by offering scholarships to attract them.

Merit Scholarships Not Only Allow Universities to Attract the Most