Question: 3. [8 points] Now a charter school system is proposing to open. This charter network can serve 25% of students and the school system will

3. [8 points] Now a charter school system is proposing to open. This charter network can serve 25% of students and the school system will provide them with the same payment per student they have been providing the public schools. The charter school would like to make as large an operating surplus as possible in their early years, so they can reinvest in the curriculum. Assume that all students would like to attend the charter school and the charter school can observe the student risk score and pick which students they will admit. Answer the questions on the following page

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