Raise or Lower Tuition

Question: Discuss about raise in Tuition Fee will increasingly Result in More Revenue, the Conditions under which Revenue Rise, fall or Remain the Same and the Things the University do to expand revenue. Answer: Raise in Tuition Fee will increasingly Result in More Revenue The universities in England, especially the public universities in England raised the annual tuition fees in England from 3000 pound to 9000 pound. The raise in the tuition fee in the beginning and on the surface meant that it is discouraging for those students who belong to the deprive class or who are coming from the poor economic background. It seemed to everyone that the country and its universities, are making education available only for those who belong to a wealthy family (Coughlan, 2016). The decision, which was regarded as a heartless decision, soon saw a vast change within four years when the number of students who have applied for the university is around 592,000. Among the number of students who have applied for the university, 22% belong to the deprived class and poor background. The raise in tuition fee structure has not only helped in bringing reform in the universities but it has also helped the poorest children in the country as well. The Conditions under which Revenue Rise, fall or Remain the Same The revenue remaining the same, rising or falling depends on the price elasticity of demand; for measuring the price demand function of the tuition fees, measuring price elasticity is necessary. The demand if it is inelastic then there will be a rise in the revenue earned by the university. The inelasticity of the demand means that if there is a 1% increase in tuition, although the enrollment of the students are less than 1%, then such a situation will help in raising the revenue earned by the university (Ashenfelter Graddy, 2016). The decrease or a fall in the revenue will occur if there is price-point elasticity (Ehrenberg, 2016). The price-point elasticity means that there will be an increase in the demand and there will be more than 1% decrease in the demand. If there is more than 1% decrease in the demand, then that will result in the fall of the revenue earned by the university. There are times when demand is inelastic and determined, that is if a 1% increase in price result in 1% increase in the total revenue then the process of reducing should be continued until the elasticity equals one. At a time when elasticity equals one, then revenue earned remains the same. The Process of Revenue at NSU The Nobody State University, gains revenue for their campus through tuition fees, but then tuition fees are only one way to generate revenue. If the revenue earned by the university is being compared with the MRP of an automobile industry, then it can be said that none of the automobiles that are being sold by the industry, follow the MSRP or rather the Manufacturer Suggested Retail Price. Various other ways are there with the help of which the automobile company or the industry generate their revenue. In the same way NSU, you could generate their own revenue, and the tuition fees are only a small part of it (Perkmann, 2016). The most important way with the help of which the university could generate revenue, is through the help of the state fund. The state funds that are being provided by the government of the state will help in increasing the revenue earned by the university. There are third party sources as well that will help in increasing the revenue of the university. The third party sources include things like donation, scholarship grants and also at times providing grants or fund for those programs that is being organized by the students. Therefore, these are the various ways with the help of which the university, could generate revenue. The Things the University do to expand revenue If the true price elasticity is (-1.2) then the university should consider reducing the tuition charges. In case of NSU there should be at least 5% decrease in the charges because if there is at least 5% decrease in the charges then should at least 6% increase in the enrollment of the student (Kutty et al. 2016). If all the other factors are remain constant, and if there is a capacity for the additional students, the number of tuitions should also be increased and if there is an increase in the number of tuitions then it will also help in increasing the revenue, or rather the total revenue earned by the university. If tuitions are raised too high then that may at times decrease the demand as well, which could affect the revenue of the university as well. Therefore, to avoid such cases there will be an increase in the tuition charges at least by one unit because if there is an increase of at least one unit price of the tuition charges then it will creates a unitary demand, which would be taken into consideration. If that is being taken into, consideration then that could result in increasing the total revenue of the university (Steigmann, 2012). The Problem being resolved The problem that is being faced by NSU could not only be solved by solving the tuitions, because the matter has been made complicated with the use of the revenue mix. Therefore, to increase the revenue that is being earned by the university, therefore it is important that only one is being controlled. Since, the problem that NSU is facing demands an increase in the revenue it is important to find, the position of NSU in the demand elasticity scale. If the position of the NSU is being found out by the university then it will help the university to take an effective decision; either to increase tuitions or to decrease warrant, if at all that is possible. It is therefore, important to have a look at the history and then come to conclusion or to a decision. If the NSU offers the students with attractive programs then the cost will not matter to them much and then they will get enroll their names in the university (Lichter, 2014). Thus, while it is true that decision making in such a situation is a complex one, it is also true at the same time that one should have a look at the history before taking a decision. References Ashenfelter, O., Graddy, K. (2016).Anatomy of the Rise and Fall of a Pricefixing Conspiracy: Auctions at Sothebys and Christies(1st ed.). Coughlan, S. (2016).Students face tuition fees rising to 9,000 - BBC News.BBC News. Retrieved 20 February 2016, from https://www.bbc.com/news/education-11677862 Ehrenberg, R. (2016).Tuition Rising: Why College Costs So Much. Retrieved 20 February 2016, from Kutty .V, S., U, S., Balagopal, D. (2016).MATHEMATICAL ECONOMICS AND ECONOMETRICS(1st ed.). Lichter, A., Peichl, A., Siegloch, S. (2014).The own-wage elasticity of labor demand. Mannheim: ZEW. Perkmann, M., Tartari, V., McKelvey, M., Autio, E., Brostrm, A. (2016).Academic engagement and commercialisation: A review of the literature on universityindustry relations.Sciencedirect.com. Retrieved 20 February 2016, from https://www.sciencedirect.com/science/article/pii/S0048733312002235 Steigmann, D. (2012). Koiters Shell Theory from the Perspective of Three-dimensional Nonlinear Elasticity.J Elast,111(1), 91-107. https://dx.doi.org/10.1007/s10659-012-9393-2 Vianello, M. (2013). Internal Constraints in Finite Elasticity: Manifolds or not.J Elast,114(2), 197-211. https://dx.doi.org/10.1007/s10659-013-9435-4