=+14.11 Policy Application: Public School Teacher Salaries, Class Size, and Private School Markets: In exercise 14.10, we noted that private schools that charge tuition operate alongside public schools in U.S.

cities. There is much discussion in policy circles regarding the appropriate level of public school teacher salaries (which are set by the local or state government) as well as the appropriate number of public school teachers (that determines class size in public schools).

A. Suppose again that private schools face U-shaped long-run AC curves for providing seats to children and that the private school market is currently in long-run equilibrium.