Defining the Relevant Market: Higher Education

I recently asked my students whether they thought the universities in Ontario are a cartel. The universities unite on many things, including lobbying the provincial gubmnt and the application submission process, and they certainly meet to discuss price co-ordination.

I wish I had had this article for the students to read [h/t to BF for the pointer]:

Students' leaders say people are trying to avoid top-up fees, which are being introduced in England's universities from autumn 2006.

There was a 17% increase in students from England applying to Scottish universities in the year to April.

Welsh universities saw a 12% increase in applications from England over the same period.

Applications to Scotland and Wales from England were 28,948 and 42,021 respectively in the year to April.

Northern Ireland also saw a rising number of applicants from England - up from 865 to 1,128.

The article doesn't say by what percentage the expected "top-up fees" will increase overall tuition, but it looks as if the cross-price elasticity of demand is pretty high.

There are many substitutes for most goods and services; demand curves are generally more elastic than people expect.