me:
>> economists call this "price discrimination," and say that it's more
>> efficient. I have my doubts.
Michael Smith wrote:
> Efficient in what sense?
I understand that the idea is that capacity is utilized more
completely with price discrimination. Also, there is a person X out
there who would benefit from going to university Y who can't pay Y's
standard tuition T. Since T is about the cost per student C, Y can
give X a discount ("financial aid"). Y gets an extra dollop of profits
(X - C), filling the seats a little more, and X gets to go to a
university that's normally out of reach. Both are made better off.
Note: this assumes that Y has a monopoly. This "efficiency" is defined
_assuming_ that this monopoly can't be abolished.
--
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
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