The Real Price Of A College Education

Over the last 30 year in the US, the real price of a college education (i.e. after adjusting for inflation) has increased by almost 70 percent. Over the same period, an increasing number of high school graduates have sought a college education. (Nationwide college enrollments almost doubled over this period.) While faculty salaries have barely kept pace with inflation, administrative staffing (and expenditures) and capital costs have increased significantly. In addition, government support to universities (particularly research funding) has been cut. a. College enrollments increased at the same time that average tuition rose dramatically. Does this contradict the law of downward-sloping demand? Explain briefly.Answer:No, this situation does not contradict the law of downward-sloping demand. This situation might have arisen because there has been drastic increase in the demand for college education over the last 30 years. When demand for college education increases, demand curve would shift rightward and as a result, there would be increase in both enrollments as well as average tuition fee. Thus situation does not contradict the law of downward-sloping demand.b. Use supply and demand curves (or shifts therein) to explain the dramatic rise in the price of a college education.Answer:As explained above, the