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You have been hired by Nobody State University (NSU) as a consultant to help the university with how to increase their total revenue. The university has been struggling in recent years, so they have hired you to help them in their last attempt to find an appropriate solution so that the university can survive.
Raise or Lower Tuition? Suppose that, in an attempt to raise more revenue, Nobody State University increases its tuition.
- Assess a raise in tuition and if it will necessarily result in more revenue.
- Describe the conditions under which revenue will (a) rise, (b) fall, or (c) remain the same.
- Explain the process of revenue at NSU, focusing on the relationship between the increased revenue from students enrolling at NSU despite the higher tuition and the lost revenue from possible lower enrollment.
- If the true price elasticity were (-1.2), discuss what you would suggest the university do to expand revenue.
- Using what you have learned in this course, explain how you would resolve this problem if you were the President of NSU.
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