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(Solved): government is considering two alternative plans for providing subsidy to private schools. Under the ...



government is considering two alternative plans for providing subsidy to private schools. Under the first plan it offers to let a number of students at a public school transfer to a private school under two conditions: It wil transmit to the private school the same per pupi subsidy it currenty provides the public school, and the private school will be required to admit the students at a below market tuition rate. Under the second plan, the government will simply provide the students with grants to cover the current market tuition rate at the private school. (Hint. Does it matter if schools receive payments directly from the government or from the consumers?)The outcomes of the two plans A. will be identical; a private school will provide identical educational services under both the plans. .will be different; under the first plan where a private school directly receives the subsidy, it will provide a level of educational services that is less than the market equilbrium quantityO C. will be identical; a private school will charge the students the same tuition rate. D. will be different, under the first plan where a private school directly receives the subsidy, it will provide a quantity of educational services in excess of the market equilibrium quantity



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