Privatization is the transfer of ownership, property or business from the government to the private sector. Most schools in the country today are owned by the US. Government. Economically speaking, the market for schools is monopoly based, meaning that most of the market consists of the business owned by the government. The issues with a monopoly is that the seller sets the price where the highest amount of profit is made, causing the business to be inefficient. By creating a bigger private sector in the market for schools, a more competitive market structure would arise. Firms would be competing for profits at the lowest price possible for the customer, forcing the firms to be efficient. Theoretically this would be beneficiary to the school system because privatized schools would act as a competitive market, working efficiently to make profits. To test the efficiency of a school we often look at student test performance and college acceptance rates, which clearly seem to be higher for private schools than for public. In theory of dealing with privatization of schools, efficiency would come from improving the resources of the school. Some of these resources would include the quality of teachers, technology available to the students, and smart learning class rooms. According to the theory of competitive market, an improvement in resources will allow the firm to produce a higher output more efficiently.
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