Explain what the correct answer is and why. Price and cost (dollars per student)

Question

Explain what the correct answer is and why.

Price and cost (dollars per student) $150 120 72 ATC 40 MC MR 15,000 24,000 30,000 36,000 Quantity of students enrolled 0 Your college decides to offer a psychology course as a MOOC that can be taken by students anywhere in the world, whether they are actually enrolled in your college or not. The demand and cost situation for the MOOC is shown in the figure. The faculty member who designed the course argues: "1 think the course should be priced so that the maximum number of students enroll. Which price should this faculty member favor?

Explanation / Answer

Correct option is C

The maximium number of students that can be enrolled without incurring economic losses is where ATC crosses the demand curve.

Q where P = ATC :

Q = 24000 and P = $88

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