In class, we learned about the characteristics of monopolies. For a pure monopoly, there is a sole seller, no close substitutes, the seller is the price maker, and there is blocked entry. When I try to think of monopolies, the closest I can think of is a company that all of us have inevitably dealt with: The College Board.
When you look up the College Board, it says it is not-for-profit. However, it has gained criticism because CB’s president makes more than $900,000 in salary and benefits. The executives of the company are also paid large amounts.
If we look at the characteristics of a pure monopoly, we can connect the College Board to a monopoly. It is the sole seller of products like AP tests, SAT subject tests, and SAT tests. Although there are competitors to the SAT test with the ACT, and AP testing with IB classes, many schools don’t offer IB classes, and there is no substitute to an SAT subject test. In our area, we only have the option of advanced classes like AP classes, where honors classes are less common as we get older, so in our own school, this is really our only option. This is the same for all the other schools that only offer AP tests. There is nothing else like an AP test that colleges consider and approve at our school, so we are forced to pay the College Board’s high prices to test. The College Board is the price maker, as they could increase prices but we’d still pay the fee because we need testing for college and because our school has no other options. There is blocked entry looking at the perspective that it is very hard for colleges to accept another type of testing.
With total yearly revenues over $600 million, the College Board has a monopoly over student testing. Although many people, including myself, recognize the prices of testing is very high, it is difficult to not result to paying for these tests because the tests College Board provides are so integral to our college application process. Although some are already criticizing the College Board’s monopoly on education, there may need to be further action to prevent the College Board from raising its prices and making it less accessible for everyone to have an equal opportunity to take such tests.
Dude, major fax. They're so lazy, they can't even come up with new tests.
ReplyDeleteCollegeBoard is a natural monopoly - it makes sense for there to only be one (or two if we include the ACT) testing companies because there is no way of easily comparing test scores. The SAT and ACT are two separate tests that both measure "college preparedness" but go about it in different ways. Maybe a solution to this would be to have the government take over standardized testing and mandate that as a "measure of college preparedness".
ReplyDeleteI agree. The biggest joke is that CB say they are non-profit. CB already has an irreplaceable position in the education industry and it is difficult for a second similar institution to develop to replace it. Since colleges regard AP and SAT as important parts of admission, it takes a lot of time and cost for a new institution to gain the recognition of so many colleges, so the CB's monopoly situation should last a long time.
ReplyDeleteI completely agree. College board is a monopoly which is part of why it is so successful. You have to take the SAT and if you want to take any AP tests or Subject Tests you have to take those through college board. You don't have any other options. Because of this college board can control the price which is why we are all willing to pay over $100 to take a single AP test. I also think it is interesting that they say they are nonprofit but it seems like they really aren't but there isn't much anyone can do about it because they are the only supplier of the standardized tests, which right now we still need. Some colleges have begun to become test optional and it is likely that more will as time goes on. It will be interesting to see how this effects the college board's success and whether they will have to change their revenue model to adapt.
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