Up in Rankings

The University of Hawaii’s College of Business Administration’s (UHCBA) undergraduate program has move up in rankings. This year the U.S. News and World Report ranked the program 13th in the nation, compared to 17th place last year. UHCBA tied with Indiana University-Bloomington. The UHCBA graduate program also went up by one place in the rankings for International Business to 21st place, tying UHCBA with Dartmouth College and George Washington University. The article acts like a free advertisement for the UHCBA as it encourages more students to consider the college based on its rankings.Since the UHCBA is higher in rankings, it will attract more students to want to go to school there. Going up in rankings can be measured as a non-price determinant, because it is an increase in measured quality. According to the Law of Demand, a change in any non-price determinant will cause a shift in demand. In this case there will be an increase in demand. With an increase in demand there will be more students applying to UHCBA. This will cause a shortage of classes available, and will require the price to increase until the point of equilibrium.The problem with this is that the UHCBA, and most other school systems in the U.S., are not in a free market system. Schools cannot adjust the tuition price based upon supply and demand; it is dictated by the state. Therefore, the way to compensate for this increase in demand is to make it harder to get into the school by raising the admission standards. Raising the standard will actually cause a decrease in demand, back to its original equilibrium point. Thus, eliminating the shortage of available classes. There is actually another way to eliminate the shortage of classes; the UHCBA could simply obtain more resources, for example more classrooms and professors.up-in-rankings.doc