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Homework answers / question archive / Assume that your current university is the only institution offering online MBA program
Assume that your current university is the only institution offering online MBA program. Assume also that there are clear advantages of online program over brick and mortar school - such as the flexibility. Which alternative would be better for your university - charge high tuition (make above normal profit) and attract less students or charge lower fees (make normal profit) but attract a lot more students?
If my university is the only one offering an online MBA and it has advantages over the traditional brick and mortar schools, I would charge higher fees and attract fewer students. The online MBA I am offering is unique and because of that I have pricing power. If competition starts as other schools offer alternatives, I will lose the uniqueness and the prices will fall. But as long as I have a unique product I will charge more for it.
