A Recent Study at a Liberal Arts College Concluded That

Multiple Choice

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. What might an economist advise the school to do?

A) Leave tuition unchanged, as a change in tuition is unlikely to enhance the school's budget by increasing revenue.
B) Decrease tuition because demand for courses is elastic.
C) Decrease tuition in order to increase revenue by boosting enrolment.
D) Increase tuition in order to increase revenue.