A recent study on enrollment at a liberal arts college concluded that demand elasticity is 0.91. The administration is considering a tuition increase to help balance the budget. The revenue-maximizing decision is to
A. decrease tuition, which should boost enrollment enough to balance the budget.
B. decrease tuition, which would bring in more revenue.
C. leave tuition as is—an increase would not help balance the budget.
D. increase tuition, which would bring in more revenue.
Answer: D
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An increase in price will result in an increase in total revenue if demand is:
A) perfectly elastic. B) relatively elastic. C) inelastic. D) unit elastic.
Between 1960 and 2013 U.S. GDP, measured in dollars of constant purchasing power, expanded about 5.0 times. However, the standard of living only increased by 4 times over this period. Explain the difference
The macroeconomist would most likely study:
A. the effects of changing beer prices on the market for pretzels. B. the effects of an increased income tax on a typical household's purchase of goods. C. how consumers in Gary, Indiana, respond to lower gasoline prices. D. the effects of a reduction in income tax rates on the nation's total output.
Which of the following defines monopolization?
A) the Securities and Exchange Commission B) the Federal Reserve C) U.S. Supreme Court D) Federal Trade Commission Act