A government offers to let a number of students ata public school transfer to a private school undertwo conditions: It will transmit to the privateschool the same per-pupil subsidy it provides thepublic school, and the private school will berequired to admit the students at a below-marketnet tuition rate. Will the economic outcome be thesame as the one that would have arisen if the governmentinstead simply provided students withgrants to cover the current market tuition rate atthe private school? (Hint: Does it matter if schoolsreceive payments directly from the government orfrom consumers?)