Changes in both the in-state and out-of-state

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The State of Maryland has determined that the mix of in-state and out-of-state students at the University of Maryland is not ideal. There is a positive externality of increasing the percentage of out-of-state students who enroll at the University of Maryland because it increases the word-of-mouth reputation the school has beyond the state's boarders. Currently the mix of the 30,000 undergraduate students is 70% from in-state and 30% from out-of state. The government would like the university to change its tuition of $10,000 for in-state students and $20,000 for out-of-state students so that the mix is 60% in-state and 40% out-of-state. The own- price elasticity for in-state tuition is -0.5 and the own-price elasticity of out-of-state tuition is 1.5. What is the new in-state tuition to lower the percentage of in-state students from 70% to 60%? N a Wa -oson from 30% to 40%? N c. How much will revenue change with changes in both the in-state and out-of-state tuition?

Reference no: EM131808451

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