Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Over 500 private tuition centres reportedly serve more than 95% of all college students
Over 500 private tuition centres reportedly serve more than 95% of all college students. Tuition fees can be high and some families pay more than $3000 a month to send their children to private tuition.
(a) Using the theory and models of market structure, examine this industry.
(b) Should government be worried about any aspect of how an industry with this particular market structure will perform?
Expert Solution
a.
Seeing that the private sector serves over 95% of the total market for college education, this is an industry that is highly privatized (i.e. laissez-faire economics).
- However, given that there are 500 schools offering more or less the same services to students (i.e. an education), this is a competitive market as there are many suppliers with little or no differentiating factors between them.
b.
The government can be concerned about the the very high costs for a college education if the schools are colluding in some way to keep prices high in order to ensure a strong return on investment. However, this is unlikely given that, with over 500 schools, it is likely that these firms are price takers and thus the market is behaving in a way where, if the price point can be lowered by firms in order to gain more market share, they would do so.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
