<blockquote>
<p>My college tutor told me that demand for college admission at our
institute is price inelastic.</p>
<p>Does this really mean that college admission at our institute is price
inelastic?</p>
</blockquote>
<p>That is not necessarily accurate. For instance, there could be <em>excess demand</em> so that a more expensive tuition makes no difference in enrollment because the wealthier students still outnumber the spots available in college.</p>
<p>Price inelasticity of demand of this college conveys the notion that a student generally does not care about tuition increases: he will enroll in this college anyway. But in reality, if there are options (that is, other colleges) from where to choose, most likely there are substitution dynamics at play even if the end result is that all spots in this college are filled up. Indeed, those wealthier students might be substituting their otherwise preferred and costlier college by enrolling in this one if their first option becomes unaffordable just like this college became unaffordable to other students.</p>

CC BY-SA 4.0
2018-11-04T22:30:02.220Z
2018-11-04T22:47:28.430Z
2020-06-17T09:40:54.643Z
Iñaki Viggers
<p>It might actually be quite elastic but income has risen just enough to compensate for the increase in tuitions! It also might be the case that demand is high enough so that the amount of available spots is fully met at any reasonable price. </p>

<p><em>A priori</em>, one just can't guarantee that the demand curve for higher education is inelastic based on the observation that over 20 years prices have risen without a significant decrease in demand. A lot can change in 20 years and one can't simply assume all things were held constant during the period. </p>

CC BY-SA 4.0
2018-11-05T01:29:36.513Z
2018-11-05T01:29:36.513Z
Pedro Cavalcante
<p>My college tutor told me that demand for college admission at our institute is price inelastic. She says so, because, in the past 20 years, price of college education at our institute has increased, but the number of students hasn't decreased. Does this really mean that college admission at our institute is price inelastic? Or is there a way I can counter that?</p>

<supply-and-demand>
If price increases and quantity remains the same can we infer that demand is perfectly inelastic?
user585380
# If price increases and quantity remains the same can we infer that demand is perfectly inelastic?

(Asked by: username_0 on 2018-11-04)

My college tutor told me that demand for college admission at our institute is price inelastic. She says so, because, in the past 20 years, price of college education at our institute has increased, but the number of students hasn't decreased. Does this really mean that college admission at our institute is price inelastic? Or is there a way I can counter that?

**Tags:** supply-and-demand


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## 2 answers

### Answer by username_1 on 2018-11-04. Score: 3

> My college tutor told me that demand for college admission at our
> institute is price inelastic.
>
> Does this really mean that college admission at our institute is price
> inelastic?

That is not necessarily accurate. For instance, there could be *excess demand* so that a more expensive tuition makes no difference in enrollment because the wealthier students still outnumber the spots available in college.

Price inelasticity of demand of this college conveys the notion that a student generally does not care about tuition increases: he will enroll in this college anyway. But in reality, if there are options (that is, other colleges) from where to choose, most likely there are substitution dynamics at play even if the end result is that all spots in this college are filled up. Indeed, those wealthier students might be substituting their otherwise preferred and costlier college by enrolling in this one if their first option becomes unaffordable just like this college became unaffordable to other students.


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### Answer by username_2 on 2018-11-05. Score: 2

It might actually be quite elastic but income has risen just enough to compensate for the increase in tuitions! It also might be the case that demand is high enough so that the amount of available spots is fully met at any reasonable price.

*A priori*, one just can't guarantee that the demand curve for higher education is inelastic based on the observation that over 20 years prices have risen without a significant decrease in demand. A lot can change in 20 years and one can't simply assume all things were held constant during the period.


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