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. 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.