It seems that only a complete idiot of a businessman would assume they will retain their current level of customer loyalty if they reduce the quality of their product w/o a commensurate reduction in price.

All of your points, CoccoBill, must be addressed by any business on a relatively constant basis for the business to thrive and grow.

There are good schools and bad schools. There are wealthy neighborhoods and poor neighborhoods. Some people don't care about much. Other people care more about their work than anything else. Your attempt to pigion-hole all schools as identical actors in their economic climate is fatally flawed in this assumption.

Just as Banana's "Let's assume we can remove survivorship bias" statement. Sure, I agree with what follows, but how can we possibly accomplish that assumption?