Economic - Demand and supply
Suppose government will abolish subsidy to Higher diploma course offered by ABC Eduction Center. Explain what will happen to equilibrium price and quantity of follwoing markets
1. Higher diploma course offered by ABC Eduction Center
2. Associate degree programs offered by other institutions
3. Labor market
Please help me ><
- Anonymous1 decade agoFavorite Answer
1. Since government has abolished the subsidy to the ABC.
The cost of running the business will increase and lead to a decrease of supply. It will then result in an increase of price and decrease in quantity transcated.
2. since associate degree programs are substitutes of the ABC education diploma. An increas of price of ABC diploma will lead to increase of demand towards tthe associate degrees, it will then increase the price and quantity transcated of the associate degree markets.
3. As anothe user has stated above, it may lead to increase of unemployment due to cost-cutting, hence increase in supply. There is also a chance that if the vacanies for the degrees are fixed, students may then have to work instead of proceed in furthur studies. Both will lead to increase in supply and quantity transcated, hence decrease in price.Source(s): myself.
- Anonymous1 decade ago
- 1 decade ago
1. price will higher as no subsidy now and demand for this course will decrease
2. price will may be higher (but not a must: because other instiutions should be expand their business first) as demand increase with some body change fm ABC eduction CTR to these institutions.
3. when the cost of running ABC eduction CTR is higher, ABC eduction will trend to fire some teachers to lower the cost. this will make more teachers to seek for other job and demand for the job with these position will be increase and salary will lower