Multiple Choice 4. The inverse demand function for private schools is given by the equation P15,000-70,...

 

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Multiple Choice 4. The inverse demand function for private schools is given by the equation P15,000-70, where P, is the private school tuition at which the number of students demanding a private school education is equal to Q. The inverse supply function for private schools is given by the equation P-5,000+3Q, where P, is the private school tuition at which the number of positions for students supplied by private schools is equal to Q. Suppose the government provides a subsidy (a voucher) of $5,000 to families for every child they enroll in a private school. How would this subsidy affect the competitive equilibrium tuition for private schools? a. Tuition would fall by $5,000. b. Tuition would increase by $5,000. c. Tuition would fall by $1,500. d. Tuition would increase by $1,500. e. Tuition would increase by $3,000. TEM coan! Multiple Choice 4. The inverse demand function for private schools is given by the equation P15,000-70, where P, is the private school tuition at which the number of students demanding a private school education is equal to Q. The inverse supply function for private schools is given by the equation P-5,000+3Q, where P, is the private school tuition at which the number of positions for students supplied by private schools is equal to Q. Suppose the government provides a subsidy (a voucher) of $5,000 to families for every child they enroll in a private school. How would this subsidy affect the competitive equilibrium tuition for private schools? a. Tuition would fall by $5,000. b. Tuition would increase by $5,000. c. Tuition would fall by $1,500. d. Tuition would increase by $1,500. e. Tuition would increase by $3,000. TEM coan!

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d Tuition would increase by 3000 Explanation The subsidy would increase the supply of private school ... View the full answer