1. Typically in economics, scarcity will be accounted for by prices: When a good is increasingly scarce, the price of that good will rise to clear the market, such that supply equals demand. One could make a similar argument for higher education. The low admission rates at selective schools such as Harvard University suggest that the supply of spaces in these schools is scarce.

Why, then, would we not expect prices to adjust such that the admission rates are equalized across all institutions? Explain.