The price elasticity of demand for Pace University for the fall of 2006 is ?(H ?
ID: 1163533 • Letter: T
Question
The price elasticity of demand for Pace University for the fall of 2006 is
?(H?int:
include the negative sign and enter your response rounded to two decimal
places.?)
The demand for places in? Pace's freshman class is price .
Calculate the total revenue generated from? Pace's freshman class in 2005.
Calculate the total revenue generated from? Pace's freshman class in 2006
The demand for places in Pace Freshman class is price (UNIT-ELASTIC...INELASTIC...ELASTIC)
The total amount of tutition Pace Received from its freshman class (FELL..ROSE) in 2006 compared with 2005
In fall 2006, Pace University in New York ralsed its annual tuition from $24,400 to $29,750. Freshman enrollment dedlined from 1,500 in fall 2005 to 1,160 in fall 2006. Assuming that the demand curve for places in the freshmen class at Pace did rnot shift between 2005 and 2006, use this information to calculate the price elasticity of demand. Use the midpoint formula in your calculation. Source: Karen W. Arenson, "At Universities, Plum Post at Top Is Now Shaky," New Yark Times, January 9, 2007 The price elasticity of demand for Pace University for the fall of 2006 isHt: include the negative sign and enter your response rounded to two decimal places) The demand for places in Pace's freshman class is price Calculate the total revenue generated from Pace's freshman class in 2005 S Calculate the total revenue generated from Pace's freshman class in 2006 S The total amount of tuition Pace received from its freshman class i ?I in 2006 compared with 2005.Explanation / Answer
1.
Price elasticity of demand for Fall-2006 = % change in quantity of seats demanded / % change in fees
Price elasticity of demand for Fall-2006 = ((1160-1500)/(1160+1500)/2)/((29750-24400)/(29750+24400)/2)
Price elasticity of demand for Fall-2006 = -1.29
2.
Demand is price elastic in nature.
3.
Total revenue in 2005 = 24400*1500 = $36600000
4.
Total revenue in 2006 = 29750*1160 = $34510000
5.
Total amount of tuition fell in 2006, in comparison to 2005.
Decrease in tuition fee = 36600000 – 34510000 = $2090000
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