Authors libby rittenberg 223

ANSWER TO TRY IT! PROBLEM
Without a third-party payer for education, the graph shows
equilibrium tuition of P1 and equilibrium quantity of education of Q1.
State support for education lowers tuition that students pay to P2. As
a result, students demand Q2 courses per year. To provide that
amount of education, educational institutions require tuition per
course of P3. Without a third-party payer, spending on education is
0P1EQ1. With a third-party payer, spending rises to 0P3FQ2.

Figure 4.18

4.4 Review and Practice
Summary
In this chapter we used the tools of demand and supply to understand a
wide variety of market outcomes. We learned that technological change
and the entry of new sellers has caused the supply curve of personal
computers to shift markedly to the right, thereby reducing equilibrium
price and increasing equilibrium quantity. Market forces have made
personal computers a common item in offices and homes.

Attributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org

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