What is the optimal level of enrollment at the tuition price of $5000.00
Enroll until the marginal cost of the next student equals $5000.
To determine the optimal level of enrollment at the tuition price of $5000.00, you need to find the point where the marginal cost of the next student is equal to $5000. Marginal cost refers to the additional cost incurred when one more unit is produced.
Here's how you can find the optimal level of enrollment:
1. Start by calculating the marginal cost of each additional student. This can be done by dividing the change in cost by the change in enrollment. For example, if enrolling an additional student increases the total cost by $10,000 and the enrollment increases by 2 students, the marginal cost would be $10,000 / 2 = $5000.
2. Continue enrolling students and calculating the marginal cost of each additional student. Keep track of the marginal cost for each enrollment level.
3. When you reach an enrollment level where the marginal cost is $5000, you have reached the optimal level of enrollment at the given tuition price of $5000. At this point, enrolling additional students would result in marginal costs higher than the tuition price.
Finding the optimal level of enrollment generally involves analyzing the cost and revenue structures of an institution and examining factors such as fixed costs, variable costs, economies of scale, demand, and price elasticity. It may vary depending on specific circumstances and the goals of the educational institution.