In 2004, the University of California education system drastically cut enrollment due to significant state budget cuts and asked 7,600 applicants to defer enrollment for two years after completing two years at a community college. Tuition costs remained fixed by the state.
a. Demonstrate the situation described in 2004 with supply and demand curves, carefully labeling any excess supply or demand for college admissions.
b. What is the market solution to the excess demand for college?
c. What is a possible reason the market solution was not pursued?