Microeconomics: Raise or Lower Tuition?

Microeconomics: Raise or Lower Tuition?

Microeconomics: Raise or Lower Tuition?

Tuition fee is the main source of revenue for learning institutions. However, the process of increasing tuition fee is very critical since it could result to loss of revenue as well. Total revenue is determined by price and quantity and thus, the price, which is the tuition for NSU is an imperative factor. Demographics and financial policies are creating great economic stratification in the United States.

This has brought challenges to students enrolling in higher learning institutions. One effect of increasing tuition for NSU is that the process would lock out low income students and overall number in the institution would decline. According to the laws of demand, when price is increased, the demand tends to decline.

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This is because many consumers would not be willing to buy the same product at an increased price without improvement in quality. In consideration to these factors before increasing tuition, the institution would be successful in increasing total revenue from the tuition increase.

References
McPherson, M. S. (2010). Keeping College Affordable: Government and Educational Opportunity. Chicago: Brookings Institution Press.

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