The objective of this study is to identify the factors that shift the demand curve for faculty at not-for-profit private institutions. It is unique in that to the author's knowledge no other study has directly addressed the question of how the positive correlation between average faculty salaries and faculty-student ratios can be reconciled with the theory of the demand for labor. The hypothesis of this paper is that "richer" universities with greater revenues per student will have a higher ratio of faculty to students "ceteris paribus" because they use a portion of their additional income to increase their number of faculty relative to the number of students enrolled at the school. Furthermore, all else equal, institutions with higher tuition and fees per student will have a higher ratio of faculty to students, meaning that students are effectively paying to have small classes and greater faculty-student interaction. An appendix is included. (Contains 1 table.)