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A small college has space for a maximum of 1,000

Question : A small college has space for a maximum of 1,000 : 148579

A small college has space for a maximum of 1,000 students. Thecollege can identify 500 of its students who are willing to pay$20,000 per year and 500 students who are willing to pay $10,000per year. The college has annual fixed costs of $10 million, andthe variable cost for each additional student is $5,000. Tocontinue operating, the college must receive payments equal to itstotal costs (that is, total fixed costs + total variablecosts).

 

 

4.2.

If the college charges all students the same tuition, whattuition can it charge to cover all of its costs?

 

 

 

A.  $15,000

 

 

B.  None of these options

 

 

C.  $20,000

 

 

D.  $25,000

 

 

E.  $10,000

     

 

Solution
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