Describe in words how the business department in your college decides how many majors to offer when the range is from one general major to perhaps a half dozen or more possibilities.

Question

What will be an ideal response?

Answer 1

Responses that compare costs of new majors with benefits to students are adequate, but a complete answer might include the following considerations. First departments should estimate what the added cost of each major will be to the department. Each additional major will cost more than the last because more specialized faculty are needed. Then they will need to estimate how much benefit students as a group would gain by having more choices. Because many students are not sure what their majors will be when they apply for college they will be attracted to schools that offer more choices so no options are foreclosed when they finally decide on a major. Therefore they will be willing to pay more for colleges with more majors, but the rate of increase in tuition they will pay declines as the number of majors rises. When the department adds the gains from higher tuition with the costs of providing additional majors they will pick the number that provides the greatest net gain of return over cost. This will be where the marginal gain in tuition which is declining will equal the marginal cost of adding a major which is increasing.