The marginal cost of educating a college student is $5,000 a year. Table 3 shows the marginal benefit schedule from a college education. The marginal external benefit from a college education is a constant $2,000 per student per year. There are no public colleges.

With no government involvement in college education, how many students enroll, what is the tuition?

Students Marginal Private Benefit (millions per year) (dollars per student per year) 1 2 3 4 567 8 5,000 3,000 2,000 1,500 1,200 1,000 800 500