Answer:
Incomplete question
Complete question:
A major state university in the South recently raised tuition by 12%. An economics professor at this university asked his students, "How many of you will transfer to another university because of the increase in tuition?" One student in about 300 said that he or she would transfer.
Based on this information, the price elasticity of demand for education at this university is
Answer: highly inelastic
Explanation:
The price elasticity is highly inelastic because despite the increment in the tuition fees (price increased by 12%), it had no significant effect on the quantity changed (number of students transferring to another school).
A major state university in the south recently raised tuition by 12%. An economics professor at this university asked his students, "How many of you will transfer to another university because of the increase in tuition?" One student in 300 said that he or she would transfer. Based on this information, the price elasticity of demand for education at this university is:
a) 1
b) 0
c) highly inelastic
d) highly elastic
Answer:
The correct answer is (c), Highly inelastic
Explanation:
According to the definition of inelastic demand, Demand price is inelastic when a change in the price causes a smaller percentage in demand. It is Highly inelastic becuase out of numerous number of students only one them said he or she would seek for transfer and this will have no effect on the demand. When find the percentage of this particular student to the rest; it will be a minus to the demand.
