Tuition Fee at the American University of Sharjah - Essay Example

The research has been conducted in an American in sharjah regarding the change in the tuition fees. The of the university were approached and were asked about their comfort level in paying the fees of the university, if they are okay with the current fee structure or if they are looking for a decrease or if they are okay if the fee increases. Different males and females were asked to fill the questionnaire consisting of 5 to 7 questions regarding the topic. The number of respondents were 46 consisting of 29 males and 17 females who were selected randomly. INTRODUCTION The topic chosen is “Demand and Supply” and “elasticity”. We wanted to understand the change in demand if there is an increase in the fee: how many students will still have a demand for it and how many students will not join. We also measured the elasticity of demand. We also wanted to find how the trends were among females and males, were they different or were they pretty much the same or they both were indifferent towards such changes. For this we have done an analytical research for which a questionnaire has been prepared consisting of 6 questions which are as follows: 1. Gender 2. Marital status 3. Living with family or away 4. Current tuition fees paid 5. Maximum fee they are willing to pay 6. Do they have scholarship, if yes then how much With this questionnaire we will assess the number of students who will join the college even if the fees increase. With this questionnaire we will be able to identify the demand among males and females and also amongst scholarship students. In the research we have hypothised that a small increase in the tuition fees of the students is not going to affect the students. This will help the people from the college authorities to understand the behavior of the students to the increase in the tuition fees. One of the main problems we might face is that there might be some errors which we might not be able to restrict. The interviewer might target some of the people whom he knows and not others whom he doesn’t know. On the part of the respondent they are affected by factors such as that when they know that they are being interviewed they might give a wrong answer. These things might affect our research but here such factors are assumed to be minimal and the information provided can be relied upon. THEORY AND IMPLICATIONS Demand and Supply analysis The demand and supply analysis is a powerful tool the can be applied to a wide variety of interesting problems. Such as: To understand how changing world economic conditions can affect market price and production or evaluating the impact of government price controls, minimum wages, price control, price support etc. Here we will be using the demand and supply analysis to determine demand and supply changes in case the tuition fees changes. Elasticity Of demand It may be defined as the percentage change in quantity demanded to the percentage change in price. EP =% change in quantity / Percentage change in price Consumer Surplus Consumer surplus is defined as the difference between the maximum price a consumer is willing to pay for a product and the price the consumer actually pays for the product. It is denoted by the area enclosed by the demand curve and the actual pay line. Here, consumer surplus can be seen as the number of students who would like to join the college after a hike in the tuition fee. Producer surplus Producer surplus is defined as the difference between the price at which the producer actually sells the product and the minimum price at which the producer is willing to sell the product. It is denoted by the area enclosed by the supply curve and the actual pay line. The graph showing the number of students okay with fees increase and students who wants a decrease shows the region under consumer surplus and producer surplus. Income effect Income Effect is the change observed in the consumption of quantity among two products (or group of products) with a change in the income of the consumer. The change is observed in the intercepts between the budget constraint line and the indifference curve. Here we assume that the price of both the products (and groups of products) is constant. Substitution effect Substitution Effect is the change observed in the consumption of quantity among two products (or group of products) with a change in the price of either or both the products. The change is observed in the intercepts between the budget constraint line and the indifference curve. Here we assume that the income of the consumer is constant. The research was conducted to understand the demand and supply analysis to the increase in the tuition fees and also the elasticity to determine the right amount of fees increase. We have hypothised that a small increase in the tuition fees is not really going to affect the students. With this research we will be able to answer this question well as we have tried to concentrate our research on the fees part specifically. We have tried to find whether the increase in the tuition fees has same effects males and females. We have also tried to find out what is the amount of increase which the students are ready to pay for both males and females. We have also tried to find out whether scholarship students are ready to pay some fees if they want to study in the college or they are there only because of the scholarship. RESULTS We gave our questionnaire to 46 respondents who were the students of the college and the following has been found: Conclusion Graph Showing The Number Of Students Okay With Fees Increase And Students Who Wants A Decrease: Here we found that the increase in the fees has some effect on the demand, supply remaining the constant. We found that the increase in the fee has led to the decrease in the demand by 22% while 78% of the students will still have demand for their respective courses. The graph depicts the consumer surplus and producer surplus regions. Conclusion Graph Showing the Number of Students Okay with the Given % Increase in the Tuition Fees Here we have taken the most pessimistic view while increasing the fee i.e. in the band from 0 to 30% increase we have calculated the elasticity taking the percentage increase as 30% and same has been done in other cases as well. It was found that in overall 27 students answered this question. It was found that if the fees increase is by 30% the elasticity of demand will be 0 and there will be no change in the number of students taking admissions. If the increase in the fees is of 60% the elasticity of demand will be .98 resulting in the decrease in the number of students taking admissions to just 11. If the increase is of 90% the elasticity of demand will be .87 and only 6 students will take admission into the college. If the increase is more than 90% then only 3 students will join and the elasticity will be 0.88. Conclusion of Chart Showing the % of Students Okay With Given Amount of Decrease in the Fees Out of 46, only 10 students were found looking for a decrease. It was found that out of the students who were looking for a decrease in the tuition fee 40 percent of the students were looking for a decrease in the fees up till 30 percent. Then it was found that the maximum number of students i.e. 50 percent was found satisfied if the decrease is between 30 to 60 percent. Then 10 percent of the students were willing to have a fee decrease of more than 90 percent. Again it can be concluded that a decrease is certainly not the way to go because only 10 out 46 students were looking for a decrease. Conclusion Graph Showing the Number of Males Okay With the Given Percentage of Change Amongst males only 17 students answered this question and it was found that if the percentage increase in the fees is by 30% then the elasticity will be 0 and there will be no change in the number of students taking admissions. If the change in the fees is of 60% then the elasticity of demand will be more than one i.e. 1.16 and only 5 males will take admission with that kind of a fees structure. If the increase in the fees is of 90% then the elasticity of demand will be 1.04 and only 1 male will take admission with this kind of fees structure and if the fees increase is more than 90% then none of the males will take admission. Conclusion Graph Showing the Number of Females Okay With the Given Percentage of Change Amongst the females only 10 females answered this question. It was found that if there is an increase by 30% then the elasticity of demand will be 0 and all the females will join the college. If the increase is of 60% then the elasticity of demand will be 0.66 and only 6 females will join the college. It was seen that if the increase is of 90% then the elasticity of demand will be .55 and only 5 females will join the college. If the increase is more than 90% then the elasticity will be .77 and only 3 females will join the college. Conclusion of Graph Showing Affect On Scholarship Students We were not able to find many scholarship students as they were just 6 in our research. Amongst the six which were asked to fill the questionnaire 50% of them said that they are okay even paying some thing if they would have got a scholarship for a lesser amount while 50% said that they prefer not paying anything when they have got the scholarship. With this an option of not giving 100% fees waiver to the scholarship students can also be taken into consideration. CONCLUSION In the end of the research after researching on the demand for their respective courses of the students to the changes in the tuition fees, we can conclude that an increase in the fee up to 30% is most desirable and will only help the college authorities to raise more funds for themselves and is not really going to affect the number of students taking admission into the college. It was found amongst both males and females that in increase in the tuitions fees was considered to be fine is no really going to affect them. It was also seen that amongst the scholarship students as well about 50% of the students if asked to will pay the fees for studying in the college. References: 1. “What is Consumer Buying Behavior?” retrieved from http://www.udel.edu/alex/chapt6.html 2. “Consumer behavior” From Wikipedia, the free encyclopedia last modified on 16 May 2011 retrieved from http://en.wikipedia.org/wiki/Consumer_behaviour APPENDICES Graph Showing the Number of Students Okay With Fees Increase and Students Who Wants a Decrease From the above demand(downward sloping) and supply(upward sloping) diagram we can make out that if there is and increase in the fee then the demand will decrease by 22 assuming that it was 100 earlier. The decrease in the demand will lead to the shift of the supply curve upward with which we will achieve the new equilibrium i.e. equilibrium 2 while it was equilibrium 1 earlier. Graph Showing the Number of Students Okay With the Given % Increase in the Tuition Fees As the fees of the students were different it is assumed to be 100 this is why the first 30% increase has been shown as 130 and so on and then the demand and supply analysis has been shown. Graph Showing the Number of Students Okay With a Given Amount of Decrease in the Fees Graph Showing the Number of Males Okay With the Given Percentage of Change Above is the demand and supply analysis of the respective courses of males. Graph Showing the Number of Females Okay With the Given Percentage of Change In the chart the demand and supply analysis of the course amongst females is shown. Graph Showing Affect On Scholarship Students As if any kind of fees is charged the number of students taking admission will decrease by 50% Read More