One reason would be that there are other benefits to Temple associated with getting students to use the copy machine. In economics, you always want to think of the alternatives. Define marginal cost and average cost. Explain what must be true about the marginal cost if average cost is rising with output. Marginal cost is the change in cost resulting from increasing output by one more unit.
Average cost is the total cost divided by the number of units.
Again, an economic explanation is in terms of costs and benefits. In particular, rationality implies that whenever the cost of doing anything goes up, people do less of it. In this case, price is generally a cost for the buyer because price paid reduces the income available to buy other goods and the cost is the value of these foregone goods. Thus, as the price goes up, people are less likely to buy as much of the good, and adding everyone's choices, the total amount demanded will likely fall with the price rise. The price elasticity of demand is the percent change in quantity demanded divided by the percent change in price.