A small college has space for a maximum of 1000 students


A small college has space for a maximum of 1,000 students. The college can identify 500 of its students who are willing to pay $20,000 per year and 500 students who are willing to pay $10,000 per year. The college gas annual fixed costs of $10 million, and the variable cost for each additional student is $5,000. To continue operating, the college must receive payments equal to its total cost (that is, total fixed costs + total variable costs).

C. In order to cover all of its expenses, the college can set it's tuition at $20,000 and then give financial aid of ______ to each student with the lower willingness to pay.

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Financial Management: A small college has space for a maximum of 1000 students
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