Answer to Question #127965 in Microeconomics for Sli

Question

You have been appointed as an economic advisor to the principle of Bright Sparks College, a firm
operating in the market for tertiary education. Over the past 18 months the following
simultaneous changes have been noticed in the market for tertiary education:
 A decrease in consumer income;
 An increase in the cost of providing tertiary education services.
Explain, with the aid of a graph, the impact of the above changes on the equilibrium price and
equilibrium quantity in the tertiary education market.

Answer 1

The supply does not change, the demand decreases, which leads to a decrease in prices and a decrease in the number of provided services of higher education.

The demand does not change, the supply decreases, the price increases, the number of services provided decreases.