The instructor has offered to teach the course for a percentage of tuition fees. Specifically, she wants $210 per person attending the class. Assume that the tuition fee remains at $490 per student.

Required:

a. Is the cost of instruction a fixed or a variable cost?
b. Determine the profit, assuming that 20 students take the course.
c. Determine the profit, assuming a 10 percent increase in enrollment i. e., enrollment increases to 22 students). What is the percentage change in profitability?
d. Determine the profit, assuming a 10 percent decrease in enrollment (ie., enrollment decreases to 18 students). What is the percentage change in profitability?
e. Explain why a 10 percent change in enrollment produces a proportional 10 percent change in profitability