How do you increase demand for your product? If your product is a college education, you can increase demand by raising the price (from the NY Times):
John Strassburger, the president of Ursinus College, a small liberal arts institution here in the eastern Pennsylvania countryside, vividly remembers the day that the chairman of the board of trustees told him the college was losing applicants because of its tuition.
It was too low.
So early in 2000 the board voted to raise tuition and fees 17.6 percent, to $23,460 (and to include a laptop for every incoming student to help soften the blow). Then it waited to see what would happen.
Ursinus received nearly 200 more applications than the year before. Within four years the size of the freshman class had risen 35 percent, to 454 students. Applicants had apparently concluded that if the college cost more, it must be better.
“It’s bizarre and it’s embarrassing, but it’s probably true,” Dr. Strassburger said.
Yet another example of irrational consumer behavior.