Why Is Student Financial Aid a Profit-Maximizing Decision for Universities

question 31

Multiple Choice

Why is student financial aid a profit-maximizing decision for universities?

• A) Universities only give financial aid to a very small number of students.
• B) As long as the students on financial aid pay some amount that is still greater than the marginal cost of attending the classes, the university still gains positive marginal profit.
• C) The university is able to charge no more than a dollar over the marginal cost of attending classes.
• D) The university gains goodwill by providing financial aid.