Suppose an Analysis of the Possible Effects of Increases in University

question 117

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.What is the implied price elasticity of demand for university attendance?

• A)0
• B)0.3
• C)3
• D)7
• E)10

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Definitions:

Discount Rate

The rate used in the DCF approach to quantify the present value of cash flows expected to occur in the future.

Monthly Payments

Regular payments made over a period of time, often used in loans or leasing agreements.

Growing Annuity

A financial term that refers to a series of cash flows or payments that grow at a fixed rate per period.

Required Rate

Required Rate, or the minimum expected rate of return on an investment, reflects the investor's risk tolerance and investment criteria.