Consider Texas’s MBA program:
a) What is the relationship between the program’s average costs and the number of students in the
program? Graph it out, supposing the current average cost is $10K per student/year with 30 full-time
students. Do you think average cost will increase or decrease with more enrollment? Why?
b) Is it potentially efficient to offer different concentrations to MBA students? Explain.
c) Does the university price-discriminate? How?
Sample Solution
