Market is increasing cost-constant cost or decreasing cost

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Reference no: EM131159592

Each year, the country’s 700-plus business schools produce a total of 80,000 MBAs. The number of business schools has more than doubled and the number of MBA graduates per year has increased 15 fold since 1970 with a growing demand for MBA graduates in the workplace. As the industry has expanded, input costs i.e. faculty salaries in disciplines such as management information systems (MIS) and finance has also increased dramatically given limited business faculty in the academia related to these disciplines. This has been suggested to provide an explanation to the rise in annual tuition for MBA degrees at business schools. Assuming the market for MBA degrees is perfectly competitive analyze the situation described here with specific focus on the shape of the long run market supply curve in this industry. As part of your answer you should draw a graph for the market for MBA degrees, explain the changes mentioned above (using the graph) and also mention whether the MBA market is an increasing cost, constant cost or decreasing cost industry.

Reference no: EM131159592

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