Apparently when we do summer budgets, we allocate x dollars to pay for faculty to teach summer classes. These classes then generate tuition revenue, which I'll call y. The problem seems to be that y and x do not interact. To take the graduate program I teach in (the MPA): we average 20+ students for our classes. To put me in front of that class will have a marginal cost of maybe $10k, at 12.5% of my salary, plus retirement contribution (no extra health costs are incurred), and a bit of electricity. Yet with 20 graduate students at tuition of $1272 each, the marginal revenue generated by this class is over $25k. We only offered three MPA classes this summer due to budget constraints, rather than our usual four. I've no doubt (student numbers are healthy) that we left $15k (revenue of $25k - cost of $10k) on the table. If the revenue side of the equation was added to the cost, we would be able to make less harmful decisions about how many classes we can 'afford' to offer.