Within the context of declining enrollment, this paper considers the questions of economies of scale, cost-quality interrelationships, and rigidities in the Ontario school system. From a survey of the pertinent literature, the author concludes that economies of scale are linked to the level, size, and pupil/teacher ratio of a school and operate only under certain conditions. The relationship between cost and quality is even less well-defined. The author quotes many researchers who claim that no statistical relationship exists between expenditures and student performance on standardized tests. Similarly, he fails to unearth evidence that demonstrates a correlation between student achievement and a low pupil/teacher ratio. The author concludes that schools will have to be closed and that school boards, through careful planning and well-publicized decision-making, can effect such closures despite the rigidities created by strong bargaining units and the existing affinity for neighborhood schools. (Author/WD)