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Economic Analysis Of Elite Higher Education In California

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Economic Analysis on Elite Higher Education in California

Introduction

Higher education is the system where education is being provided beyond the high school level. In the U.S. we call it colleges, universities and institutions of technology. The degrees offered at higher education institutions are undergraduate, graduate, and post-doctoral levels. Professional level education also included in the higher education system, such as medical, law, vet nary and pharmacy. Higher education is playing a major role of a country’s social economy. In the U.S., companies are looking for highly skilled and talented students to recruit in their organization and leverage their skills and talents towards their vision and fortune. These talented students …show more content…

Substantial economies of scale, and
4. High entry barriers to the market
Concentrated market where price in inelastic tend to be Oligopolistic markets. A California elite higher education institution comes under this market structure. The substitutes to the California elite public higher education institutions are from private universities or colleges such as Stanford, Cal State.
As with monopoly, barriers to entry limit the ability of new higher education institutions to compete effectively in oligopolistic industries. The economies of scale are probably the most significant entry barrier protecting firms in an oligopolistic industry. A potential competitor may be unable to start out small and gradually grow to the optimal size, because it must gain a large share of the market before it can minimize its per-unit cost. Other factors, including government-imposed entry restraints and the existing premium university’s reputations can also prevent new higher education institutions from entering profitable oligopolistic industries.
The exhibit 2 shows that there is only room for a few major institutions for a given LRATC. An Oligopoly exists in the higher education system because of the demand inelastic …show more content…

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