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16 June, 23:25

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:

- highly elastic.

- highly inelastic.

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  1. 16 June, 23:53
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    The price elasticity of demand for education at this university is highly inelastic.

    Explanation:

    The definition of elasticity of demand is the degree of change in the demand for a good with the change of its price.

    In this case, the change in the demand is very low, only 1 student of 300 will leave the university if the price increase.

    So we can say this demand is inelastic.
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