A Small Private University Normally Charges the Same Price -$200-Per

question 4

Essay

A small private university normally charges the same price -$200-per credit-hour for all courses and for all students.While the university is pretty near capacity in the fall and spring,it finds that its classrooms are only about 60 percent occupied during the summer session.A student of operations management wonders if revenue management might be useful to both the university and its students alike.This student,with help from some economics majors,estimates a demand curve for summer course enrollment.Points on this demand curve include 9000 credit-hours at the current rate of $200,12,000 credit hours at $180,15,000 credit-hours at $160,and 18,000 credit-hours at $140.Based on this demand curve,what price point would best serve the university,if its objective is the greatest revenue for the summer session?

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Definitions:

V

Typically stands for Velocity in economic contexts, referring to the rate at which money circulates in the economy.

Monetary Policy

The process by which a central bank, like the Federal Reserve, controls the supply of money, often targeting an inflation rate or interest rate to ensure economic stability and growth.

Primary Growth

The initial stage of growth or expansion in an organism, market, or economic indicator, often characterized by rapid increases or significant changes.

Economy

The system of production, distribution, and consumption of goods and services within a particular society or geographical area.