Gigantic State University Raises Tuition for the Purpose of Increasing

question 204

Multiple Choice

Gigantic State University raises tuition for the purpose of increasing its revenue so that more faculty can be hired.GSU is assuming that the demand for education at GSU is

• A)decreasing.
• B)relatively elastic.
• C)perfectly elastic.
• D)relatively inelastic.Difficulty: 02 Medium

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Definitions:

Price Elasticity

A measure of the sensitivity of the quantity demanded or supplied of a good to a change in its price.

Health Care

The maintenance or improvement of health via the prevention, diagnosis, treatment, recovery, or cure of disease, illness, injury, and other physical and mental impairments in people.

Perfectly Inelastic

Perfectly inelastic describes a situation where the quantity demanded or supplied does not change in response to a change in price.