Elasticity: Supply and Demand and Financial Aid Essay example

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Elasticity: Higher Education

I would expect the price elasticity of demand to be higher at an aggregate level school than at an individual school. An aggregate leveled college is more publically and well known in more than one area or state so they tend to have more people flock to them which allows the colleges to raise their prices and have a higher rate on a broader scale if they want to or see fit. An individual school is or may not be as widely known and maybe be limited to just that city or state so therefore the college has to keep a cheaper price that will appeal more and provide a way for the people near them a fair chance to afford. Such example is Baker versus U of M. You would not expect to go to Baker and pay as much as U of M and definitely won’t find classes or credits as cheap at U of M. U of M is a largely known university and attracts a lot of people from near and far which allows them to charge a rate that may have a larger price elasticity. College decision makers should not believe that their price elasticity of demand is essentially zero. Nothing comes for free and even if a person gets aid or help they will still have some money to come up with whether it’s a loan repayment or small fee on the end. When I made my college decision price was the number one thing I looked at. I was a child that came from a good home and my parents had good jobs but I still had to basically help myself thru college. After I put in a financial aid application and received an answer back on how much help I had I choose my college. I knew that I would have to figure out the rest on my own so the less was better at the time for me. I choose our local community college but I feel if I would have had a few more thousand dollars I probably could have chosen a different school to go to.
I would expect the price elasticity of demand to be higher for non-aid students than it will for students with financial aid. People without financial aid will initially have to come up with more money than a person that has financial aid. For example If I do not receive financial aid and my tuition is about sixty thousand a year it would be more expensive and very hard for a person that has the same tuition but receives about forty - forty five thousand a year in financial aid whether
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