Price Elasticity of Demand for Delta State University: 2000-19
Abstract
The percentage change in the price is measured as (ending price – beginning price) / beginning price. Delta State University (DSU) raised tuition (price) by 123% over 20 years from $2,696 in the year 2000 to $7,501 in 2019, or by $4,805 -- (7,501 – 2,696) / 2,696 = 4,805 / 2,696 = 178%. Increase/decrease in the quantity demanded (student enrollment) is measured as (ending enrollment – beginning enrollment) / beginning enrollment. Total student enrollment was 3,782 in the year 2000 and 3,761 by the year 2019. This was a 1% decrease – (3,761 – 3,782) / 3,782 = -21 / 3,782 = -0.01 = -1%. In spite of a 178% price increase, there was only a 1% drop in students (quantity demanded) for DSU. The price elasticity of demand for DSU was calculated as 0.01, very inelastic. The results imply that DSU should raise tuition again to increase revenue.