This assignment consists of three parts. Part 1: Imagine that the tuition fee for the schooling is increased by 20%. How do you think this will affect demand for schooling and consumer behavior? Why? How would you describe the elasticity of tuition? Explain. Part 2: Imagine that there are currently 10,000 students enrolled at your institution. The institution decides to increase it tuition fee, and the enrollment falls to 9,000. Let assume that tuition started at RS. 4,000 per semester but has since gone up to RS. 4,800. What is the elasticity of demand? Part 3: How will this impact total revenue for your institution? What suggestion would you give to the institution?
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Assignment: Elasticity and Tuition
Part 1: Imagine that tuition for your schooling has increased by 20%. How do you think this will affect demand and consumer behavior? Why? How would you describe the elasticity of your tuition? Explain.
Part 2: Imagine that there are currently 10,000 students enrolled at your institution. The school decides to increase tuition, and enrollment falls to 9,000. Tuition started at $4,000 per semester but has since gone up to $4,800. What is the elasticity of demand?
Part 3: How will this impact total revenue for your institution? What inferences can you make from this information?
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