A college raises its annual tuition by 25%, and its student enrollment falls by 3.5%. Compute the price elasticity of demand.

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A college raises its annual tuition by 25%, and its student enrollment falls by 3.5%. Compute the price elasticity of demand.

Is demand elastic or inelastic? Will TR increase, decrease, or remain the same? ED = nothing (round at 2 decimal places). What are the units for elasticity? A. $ B. qty C. elasticity does not have a unit; it is just a number D. %

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1 answer:

Diano4ka-milaya [45] · Answer 1 · 2022-06-21T02:55:07+03:00

Answer:

Elasticity does not have a unit because it is a pure number

Demand is Elastic

TR decrease due to the demand been elastic. a rise in tuition fee causes the total revenue to decrease

Explanation:

Tuition fees increment by 25%

Student enrollment decreases by 3.5%

Price elasticity of demand=%change in quantity demanded / %change in price

= -3.5/ 2.5

= -1.40

A college raises its annual tuition by​ 25%, and its student enrollment falls by​ 3.5%. Compute the price elasticity of demand.

A college raises its annual tuition by 25%, and its student enrollment falls by 3.5%. Compute the price elasticity of demand.