Over the last 30 years in the United States, the real price of a college education (i.e., after adjusting for inflation) has increased by almost 70 percent. Over the same period, an increasing number of high school graduates have sought a college education. (Nationwide college enrollments almost doubled over this period.) While faculty salaries have barely kept pace with inflation, administrative staffing (and expenditures) and capital costs have increased significantly while government support to universities (particularly research funding) has been cut.
a) College enrollments increased at the same time that average tuition rose dramatically. Does this contradict the law of downward-sloping demand? Explain.
(b) Use supply and demand model to explain the dramatic rise in the price of a college education.
Complete this essay in a Microsoft Word document, with a minimum of 350 words, APA formatted with references.
In 2002, the Atlanta Journal and the Atlanta Constitution, once fierce competitors, merged to become the Atlanta Journal-Constitution, the only remaining daily newspaper in the city.
a. Before the merger, each of the separate newspapers was losing about $10 million per year. What forecast would you make for the merged firms profits? Explain.
b. Before the merger, each newspaper cut advertising rates substantially. What explanation might there be for such a strategy? After the merger, what do you think happened to the Atlanta Journal-Constitutions advertising rates?
c. What do you think the increased availability of online news sources has had on advertising rates?