Are Universities Cartels - Essay Example

The entry of universities which are responsive to societal needs has a profound effect on American education market (Dodgson et al 2009). In the oligopoly, learning institutions are driven by profit maximization. The United States market entry and exit barriers are flexible. A telling example is the Stanford’s free online Robotics and artificial intelligence courses. In the previous years, the largest barriers to the education US market entry have been economies of scale and strategic actions by the incumbent universities.

Access to complex technology and government regulations in the US education market have relatively small impact on the market forces. The courses have attracted tens of thousands students. This has caused a shift from the traditional approach in education market. Virtual subgroups between lecturers and students have affected the learning costs (Tschang & Della 2001). The market trends have been altered as new ways of meeting the demand become introduced. These trends have indicated that the market position of the state universities is under severe threat.

A telling example is the cooperation between AT & T and university of Phoenix on employee training. The culture of education cartels is losing ground as innovative ways of meeting education demands continue to gain ground (Tschang & Della 2001). . Perfect competition and oligopoly in the American education market is demand products to be defined. A product is defined as a good or service produced by universities in an education market. Products and units of production affect the demand and supply forces in the education market.

The availability of products in the education market is directly correlated to pricing. Defining products and units of output is directly related to pricing. Market forces in the education market are overcoming the significance of collusion theory and competition is rising. Pricing is an important aspect in the education market in the United States. In the study of education market in US, definition of productions and units of output affects competitiveness and brand equity profoundly (Dodgson et al 2009).

Cartels within the traditional university systems face direct challenges from virtual universities (Kreps 2004). The education market is increasingly becoming competitive leading to reduced prices in traditional degree programs as new programs take the center stage (Newman et al 2004). Programs and units are packaged in affordable and convenient methods e g the decrease in the cost of traditional courses and demand in virtual courses grows. (Dodgson et al 2009). Careful decisions are focusing on the nature of courses offered and the place of offering them.

The universities are getting involved in corporate social responsibility. Technology has overcome geographical barriers through electronic learning (Tschang & Della 2001). The modern US universities are developing other responsive measures of raising revenues and quality of services in an increasingly competitive education market. In conclusion, the American education market is experiencing