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

question 80

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% occupied during the summer session. A student of operations management (who has recently read this chapter) wonders if yield 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:

California

California is a state located on the West Coast of the United States, known for its diverse geography and as a hub of entertainment, technology, and agriculture.

Air Pollution Standards

Regulations established by government agencies aimed at controlling the emission of pollutants into the air to protect public health and the environment.

Industrial Solvents

Chemical substances used in manufacturing processes to dissolve, dilute, or extract other materials without chemically changing either the solvents or the other materials.

U.S. Army Corps

A federal organization responsible for public engineering, design, and construction management, including improvements to natural resources and infrastructure.