Question 6(Marks: 15)

You have been appointed as an economic advisor to the principle of Bright Sparks College, a firm operating in the market for tertiary education. Over the past 18 months the following simultaneous changes have been noticed in the market for tertiary education:

• A decrease in consumer income;
• An increase in the cost of providing tertiary education services.
• Explain, with the aid of a graph, the impact of the above changes on the equilibrium price and equilibrium quantity in the tertiary education market.
• (Note:Seven marks for a graph and 8 marks for the explanation.)
• Marks will be awarded for your ability to integrate theory with the scenario provided.