Suppose an Analysis of the Possible Effects of Increases in University

question 156

Multiple Choice

Suppose an analysis of the possible effects of increases in university tuition fees predicts that a 10% increase in tuition fees will result in a 3% decline in enrolment.Given the information this provides about price elasticity of demand,what is the predicted effect on total expenditure on tuition fees?

• A)total expenditure will decrease
• B)total expenditure will decrease by 7%
• C)total expenditure will decrease by 3%
• D)total expenditure will increase
• E)total expenditure will remain constant

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Definitions:

Future Cash Inflows

Future cash inflows are the expected receipts of cash that a business anticipates receiving from operations, investments, or financing activities in the future.

Manufacturing Flexibility

The ability of a production system to quickly adapt to changes in the types and quantities of products demanded.

Qualitative Characteristic

Attributes that contribute to the usefulness of information presented in financial statements, including relevance and reliability.

Investment Analysis

The process of evaluating an investment for profitability and risk, ultimately leading to a decision on its appropriateness.