A recent study at a liberal arts college concluded that demand elasticity is 0.9

Question

A recent study at a liberal arts college concluded that demand elasticity is 0.91 for college courses. The administration is considering a tuition increase to help balance the budget. An economist might advise the school to: A. decrease tuition in order to increase revenue by boosting enrollment. B. increase tuition in order to increase revenue. C. leave tuition unchanged as a change in tuition is unlikely to enhance the school's budget by increasing revenue. D. decrease tuition because demand for courses is elastic. E. both a. and d.

Explanation / Answer

A. decrease tuition in order to increase revenue by boosting enrollment.

the demand for tutions is inelastic so option D is wrong
since it is inelastic by furthur increasing tution the demand falls

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