Given that Ivy Leaf University has found that when they raise their $50,000 per year tuition by 5 percent, 15% of their 10,000 students decide to transfer (same as the previous question), might such a raise in prices be a good or bad decision for the University in terms of revenue generated (revenue=DQ*P)? Why? What type of a good is an Ivy Leaf education - elastic or inelastic?

Given that Ivy Leaf University has found that when they raise their $50,000 per year tuition by 5 percent, 15% of their 10,000 students decide to transfer (same as the previous question), might such a raise in prices be a good or bad decision for the University in terms of revenue generated (revenue=DQ*P)? Why? What type of a good is an Ivy Leaf education - elastic or inelastic?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter5: Price Elasticity Of Demand And Supply

Section: Chapter Questions

Problem 7SQ

See similar textbooks

Similar questions

Suppose you learned that the price elasticity of demand for wheat is 0.7 between the current price for wheat and a price 2 higher per bushel. Do you think that farmers collectively would try to reduce the supply of wheat and drive the price up 2 higher per bushel? Explain your answer. Assuming that they would try to reduce supply, what problems might they have in actually doing so?
Suppose that the quantity of steel demanded in France is given by Qk = 100 +2Ps + 0.5Y + 0.2PA, where Qs is the quantity of steel demanded per year, Ps isthe market price of steel, Y is real GDP in France, and PA is the market priceof aluminum. In 2011, Ps = 10, Y = 40, and PA = 100. How much steel will bedemanded in 2011? What is the price elasticity of demand, given marketconditions in 2011?
When JMU decreased its tuition from $300 per credit to $250 per credit the enrollment increased from 20,000 to 30,000. Explain if JMU education is elastic or inelastic.
Consider a public policy aimed at smoking. 1. The government commissioned a research firm, Super Consulting, to conduct a study on the market demand for cigarettes in Malaysia. The firm reported that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes costs $2 and the government wants to reduce smoking by 20 percent, by how much should it increase the price? 2. If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking after 1 year from now or 5 years from now? Explain 3.Super Consulting also found that teenagers have higher price elasticity than adults. Why might this be true? Explain 4. Outline and discuss the appropriate economic policies that can be implemented to reduce smoking.
When UVA decreased its tuition from $300 per credit to $250 per credit the enrollment increased from 20,000 to 30,000. Explain if UVA education is elastic or inelastic.
Consider a public policy aimed at smoking. The government commissioned a research firm, Super Consulting, to conduct a study on the market demand for cigarettes in Malaysia. The firm reported that the price elasticity of demand for cigarettes is about 0.4. If a pack of cigarettes costs $2 and the government wants to reduce smoking by 20 percent, by how much should it increase the price? If the government permanently increases the price of cigarettes, will the policy have a larger effect on smoking after 1 year from now or 5 years from now? Explain Super Consulting also found that teenagers have higher price elasticity than adults. Why might this be true? Explain Outline and discuss the appropriate economic policies that can be implemented to reduce smoking.
Using the same given, over what range of prices is y elastic with respect to p?
Suppose the demand for a product is given by QD=100-5P, where QD is quantity per year measured in kilogram and P is the price in AUD per kilogram. The supply curve for this product is given by QS=4P-8. Calculate the elasticity of demand and supply at the equilibrium price.
Let's say you cultivate oranges. Would you anticipate a more elastic or inelastic need for your orange? Why?
According to studies undertaken by the U.S. department of agriculture, the price elasticity of demand for cigarettes is between -0.3 and -0.4. Suppose congress, influenced by studies linking cigarette smoking to cancer plans to raise the excise tax in cigarettes so the price rises by 10 percent. The expected effect the price increase will have on cigarette consumption is?
What are the five scenarios where the concept of "elasticity" can be advantageous for economic participants.
Luchansky and Monks (2009) estimate that the U.S. demand curve for ethanol is Qequals=p Superscript negative 0.504 Baseline p Subscript g Superscript 1.269 Baseline v Superscript 2.226p−0.504p1.269gv2.226, where Q is the quantity of ethanol, p is the price of ethanol, p Subscript gpg is the price of gasoline, and v is the number of registered vehicles. What is the elasticity of demand for ethanol? Part 2 The elasticity of demand is the percentage change in quantity divided by the percentage change in price: