If Stimpson University increases tuition in order to increase its revenue, it will:
A) not be successful if the demand curve slopes downward.
B) be successful if demand is elastic.
C) be successful if demand is inelastic.
D) be successful if supply is elastic.
E) be successful if supply is inelastic.

Question

Quizplus · Accepted Answer

If demand is inelastic, a tuition increase will result in a relatively small decrease in enrollment but a significant increase in total revenue. This is because students are willing to pay a higher price, even if it means taking on more debt or making sacrifices in other areas, because they perceive the value of a Stimpson education to be worth the cost. Conversely, if demand is elastic, a tuition hike will result in a large decrease in enrollment and potentially even lower revenue, as students seek out cheaper alternatives or choose not to attend college at all. Therefore, increasing tuition is only feasible if demand is inelastic.

If Stimpson University Increases Tuition in Order to Increase Its