Market equilibrium occurs when the amount of people that are willing to buy equa
ID: 1105658 • Letter: M
Question
Market equilibrium occurs when the amount of people that are willing to buy equals the amount of people that are willing to sell. A steadfast tenant in economics. As students here at Post let’s surmise that right now Post is at market equilibrium. We have enough Instructors to match the number of students. However, two scenarios occur; first, student enrollment falls, so Post decides it must now raise tuition. Not good…. Or, enrollment increases! And Post decides to, you guessed it, increase tuition. Why in each scenario would the University raise tuition and, why should tuition NOT be raised, in either scenario? Talk to this from both your point of view as well as if you were on the Board of Directors for the University. What’s the right thing to do, and why???
Explanation / Answer
Ethically seeing institutions of knowledge in terms of economics / money is wrong, so in the scenario when the no. of enrollments increased, increasing the tuition fees is not a good alternate, because money making should not be the vision and ambition of any educational institution, in the other scenario when enrollment is decresed, in this situation increasing tuition fee is a neccessity in order to maintain the infrastructure and pay salaries to the teachers and other staffs, but this rise in tuition should be justified properly. Instituions around the country get funds from the government for work in research and other infrastructure development, so as a member of board of directors will discuss this isuue with governor and other legislators regarding monitory support, after trying all the available options then putting the burden on students by increasing the fee should be the last option.