logo

Economics of Higher Education

   

Added on  2020-04-07

4 Pages611 Words189 Views
 | 
 | 
 | 
QuantitySupplyDemand PriceP*Q*P1pP2Q2Q3S3Q3S4Wealth By Degrees(1) Effects on the price of a degree in a scenario of falling government subsidies: Figure-1The demand-supply diagram of Figure-1 describes the scenario of demand for quality highereducation at a particular price and the supply of quality education at that price. As per the abovediagram, the downward sloping demand curve describes that the investment or demand forquality education decreases as the price for quality higher education increases. The positivelysloping supply curve describes that with higher payment of price or investment the supply ofhigher education increases. Thus the demand-supply curve describes the scenario that the priceor cost of earning a higher education degree with good quality is rising over time.At the equilibrium price P* the demand for higher education is Q*.If the cost or price rises to P1,then the demand for higher education is expected to decreases to Q3 but at this price the supplyof higher education is “S3”.Thus if the cost or price of higher education increases then there will
Economics of Higher Education_1

D2Q3’QuantitySupplyDemand, D1Price for skilled labourP*Q*P1pP2Q2Q3S3Q3S4be a excess supply gap of higher education by the amount of Q3S3.Similarly if the cost ofearning higher education decreases then there will be a excess demand gap for higher educationby the amount of Q2-S4(2) “When firms are hungry for skilled workers, their demand for university graduatesgrows” Figure-2When the firms are showing a higher demand for skilled workers who are supposed to be theuniversity graduates, the demand for university education increases as indicated by the outwardshift of the demand curve from D1 to D2 in Figure-2.With the new demand curve D2 when the
Economics of Higher Education_2

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents