Using the factors that influence the price elasticity of demand, do you think a college education is an elastic or inelastic good? State the factors and then support your answer

Often times when a college campus has overcrowded parking, they raise the price of parking permits to lessen the problem. Does this policy work? Explain why or why not using supply and demand and/or elasticity

College education can be considered as an inelastic good. Admissions in colleges are based on the merit of the students. Students aspire to get enrolled in colleges that have some sort of reputation with regard to placements and quality of education offered.

Therefore, if a student is able to secure a seat in a college, they do not care much about the fees that have to be paid for it. Generally, the requirement of education is not governed by the charge of education, and since the low-income groups get scholarships and discounts, it does not affect the wellbeing of the population also; therefore the demand of college education does not change much according to changes in the fees (prices) of the institution.

Demand elasticity is governed by various factors like the nature of the product or service and substitutes availability etc.

For services like the provision of education, people are not willing to settle for less and their demand for the service is not deeply affected by the changes in prices and so on.

Parking in the college is more like a complementary requirement with the college education requirement. People coming from various places require to safely park their vehicles in the college premises. Hence, in a way, the demand for a parking area also becomes inelastic and changes in the fee to park do not affect the people much. Hence, increasing the prices wouldn?t necessarily help in lessening the problem of overcrowding.