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Calculate annual elasticities for both types of quantity variables (i.e., you will have an elasticity of price vs. headcount, and one of price vs. credit hour). You will get an error message in your calculations when the tuition doesn’t change from 2006-2007, since the elasticity calculation will be trying to divide by zero; just delete those in your Excel table so that the cells are blank. The first headcount elasticity will be calculated based on the 2000 and 2001 values of tuition and headcount and should be about -0.008; the first credit hour elasticity will also be based on the 2000 and 2001 values and should be about 0.359). Calculate the average elasticity for headcount (from 2001-2016), and the average elasticity for credit hour (from 2001-2016).
Many administrators argue that, to increase revenue to cover budget shortfalls, tuition should be raised. Comment on this suggestion, using the evidence you’ve uncovered.
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