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Interest in virtual education is on the rise as schools offer personalized learning and flexible schedules. Enrollment in online schools continues to increase, impacting Charter Schools. The popularity of online schools is growing, leading to a decrease in demand for charter schools due to the falling prices of online education. Cross elasticity of demand is positive, indicating a substitution effect. The price decline of online schools results in higher demand, reflecting a movement along the demand curve. The quantity demanded increases as the price of online education decreases.
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Interest in virtual education is rising • Schools offer individualized learning and a flexible schedule • Enrollment continuing to increase
Charter Schools • Online schools become more popular • The price of online schools, a substitute for charter schools, falls • Demand for charter schools decreases • Positive cross elasticity of demand Price (hundreds of dollars per student) 15 10 Cross Elasticity of Demand: -5 percent/ -10 percent= 0.5 5 D0 D1 Quantity (thousands of students) 2 4 6
Online Schools • As the price of online schools declines, the quantity demanded increases • There is a movement along the demand curve for online schools Price (hundreds of dollars per student) 15 1 10 2 D1 5 D0 2 4 6 Quantity (thousands of students)
