Elucidate susans analysis and recommendation

Assignment Help Macroeconomics
Reference no: EM1327104

Analysis of Demand Curve

You are hired as a consultant to a president of a liberal arts college in the East. You are asked to evaluate a recommendation by the college's Admissions Director, Susan Hansen, to increase tuition and to reduce financial aid to students. Susan argues that the data from competing colleges suggest that the demand curves for colleges slope upward--the quantity demanded increases with price. Susan projects the increase in tuition and reduction in financial aid will solve the school's financial problems. Last year, the college enrolled 400 new students who each paid an effective tuition of $15,000 (after financial aid), totaling $6,000,000. She projects with the increased demand from charging an effective tuition of $25,000, the college will be able to enroll 600 new students (of equal or better quality), totaling $15,000,000. Evaluate Susan's analysis and recommendation. Include the equation in your analysis and find the school's elasticity coefficient.

 

Reference no: EM1327104

Questions Cloud

Lerner index to compute your price mark-up : Lerner Index to compute your price mark-up. What is your optimal price if you produce 1000 units.
Utilizing the supply and demand model : Utilizing the supply and demand model, explain what would happen to the supply curve during a drought. Also explain the affect on the price of water.
Sailright inc makes and sells sailboards : Sailright Inc. makes and sells sailboards. Management believes that the price elasticity of demand
Illustrate the point price income also cross elasticities : Illustrate the point price, income, also cross elasticities at the present values. Interpret your answers, saying how much a 1% change in each variable impacts demand.
Elucidate susans analysis and recommendation : Elucidate Susan's analysis and recommendation. Include the equation in your analysis and find the school's elasticity coefficient.
Over the past recent months it has been selling its widgets : Over the past recent months it has been selling its widgets for $100 each and unit sales have averaged 5,000 units per month.
As the research begins to come in about your expansion : As the research begins to come in about your expansion opportunities abroad, the marketing department has discovered that the price elasticity
Illustrate the factors comprises in making decisions : Illustrate the factors comprises in making decisions about pricing tobacco products indicating which would be the most influential.
Illustrate toms price elasticity of demand demand curve look : Illustrate Toms price elasticity of demand also what does his demand curve look like (either verbally explain the shape of the demand curve

Reviews

Write a Review

Macroeconomics Questions & Answers

  Utility function and total wealth

What is the amount of the difference between the maximum premium and AFP, and what is this called?

  Computation of quantity and profit

Find out what quantity of the book Warm fuzzy should print, and what price it should charge in order to maximize profit.

  Algebraically find the equilibrium price output combination

Lawn mowing services are supplied by a host of individuals in the suburb of Westbrook. Demand and supply conditions in the perfectly competitive domestic for lawn mowing services are:

  Output and profit maximizing price for monopoly

What is the profit-maximizing price and output? What is the total profit? What is the price elasticity of demand at the profit maximizing output?

  National income accounting and canadian economy

In national income accounting identity showing the equality between national saving and investment, what is the representation of private saving and what is the representation of public saving?

  Income and substitution effect for normal good

Suppose the price of food increases from Px1to Px2. On a clearly labelled graph, illustrate the income and substitution effects of the price change on the consumption of food.

  Filling blanks from utility theory

The entire satisfaction consumer gets from consuming a good or service is________ utility, but the extra or additional satisfaction that a consumer gets from a good or service is ________ utility.

  Estimate equilibrium price and output

Compute the monopoly equilibrium. Compute the consumer surplus. Assume this firm practices two-parts tariffs, Compute the optimal output.

  Expansionary fiscal policy

In which of the following circumstances is expansionary fiscal policy more likely to lead to a short-run increase in investment? Explain?

  Expansion for solow growth model

According to the Solow growth model, a country that increases its rate of capital investment can overcome diminishing marginal returns to capital and achieve sustained high growth over time.

  Average cost schedule for perfectly competitive firm

Suppose that a firm is a perfectly competitive industry has the following total cost schedule: Compute a marginal cost and average cost schedule for this firm.

  Production-price and profits for monopolist

A monopolist encounters the following demand curve: P=120-0.02Q-What is the level of production, price and total profits per week?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd