Many colleges and universities are witnessing a shift in demographics due to women having fewer children today.

The birth rate fell from an average of 2.1 births per woman in 2007 to 1.7 births in 2018. The declining birth rate will reduce the college age population by as much as 15%

between 2025 and 2029. How will the declining birth rate affect university operations? Answer the questions below.

a. Do higher-education institutions have large or small fixed costs? What are the variable costs for colleges and universities?

b. Given you answer in part

a, how would you describe short-run average total cost?

c. If universities are operating where short-run average total costs are minimized, what will happen to the average cost per student of higher education if universities experience a decline in enrollments?