Your school decides to increase the intake of new students next year

To make its decision, what economic concepts would it have considered? Would the school have used the "economic way of thinking" in reaching its decision? Would the school have made its decision on the margin?

The school would consider the extra revenue that each additional student would bring and compare that to the extra cost of providing each student with instruction and service. By comparing the extra revenue and the extra cost, the school is making its decision on the margin and is using the economic way of thinking. If the school compares the additional revenue to the additional cost, it makes its decision on the margin.