Businesses answer this question by balancing their profit and loss statements. In a free market, schools would do the same.
Well, I guess this means we'd be operating at a heavy loss, due to highly insufficient supervision and management capacity. Last I checked, profit was not our primary purpose. I don't think I want my own children in the hands of people whose primary purpose is profit. Again, just my humble opinion, more as a parent than as an educator.
Free market can have a wide range of meaning in education. Please elaborate.