If Education R Us University thought that it faced an inelastic demand for the regular academic year but an elastic demand for summer school, and it wanted to increase its total tuition revenue, it would want to____ tuition in the regular academic year and ____ tuition for summer school
A)Increase; increase.
B)Increase; decrease.
C)Decrease; increase.
D)Decrease, decrease.

Question

If Education R Us University thought that it faced an inelastic demand for the regular academic year but an elastic demand for summer school, and it wanted to increase its total tuition revenue, it would want to____ tuition in the regular academic year and ____ tuition for summer school
A)​Increase; increase.
B)​Increase; decrease.
C)​Decrease; increase.
D)​Decrease, decrease.

Quizplus · Accepted Answer

When demand is inelastic, increasing prices can lead to an increase in total revenue because the percentage decrease in quantity demanded is less than the percentage increase in price. Conversely, when demand is elastic, decreasing prices can lead to an increase in total revenue because the percentage increase in quantity demanded is greater than the percentage decrease in price. Therefore, Education R Us University would want to increase tuition in the regular academic year (inelastic demand) and decrease tuition for summer school (elastic demand) to increase its total tuition revenue.

If Education R Us University Thought That It Faced an Inelastic