Raise or Lower Tuition Research

In an analysis of the impact of raising tuition fees, it would be imperative to consider cost implications and how the same affect the revenue stream. There is a close link between the rise in the cost of courses offered at the institution and the fall in the number of students enrolled at the university. The institution relies on tuition fees as the main source of income and therefore, it is critical for the management to bring the concept of price elasticity into the bigger picture. There is a growing trend where students consider staying away from enrolling in expensive courses since this translates to financial burden in the future. There exists an intricate balance between the amount of tuition fees that students pay and the quality of education offered; hence institutions of higher learning must find a way to ensure students perception of the standards of education is positive.

Further, in an instance where price elasticity of demand is equal to one, an increase in tuition fees would lead to no changes in the total revenue stream. When the price elasticity of demand at NSU is at -1. 2, the implication is that the demand is inelastic, and as such, an increase in tuition fees would lead to increase in the revenue stream for the institution. The Nobody State University should increase the tuition fees since the decline in enrollment of students is insignificant. The NSU revenue process NSU has different sources of revenue and one of them is financial aid, where students unable to pay their tuition fees get funding through work-study programs, student loans, and scholarships. The above action would be most suitable in a scenario where demand is elastic to changes in price.