The first part of this paper discusses two principal forms elaborated upon in previous literature for describing the relation between per pupil operating costs and school enrollment size. The first of these forms indicates that average per pupil costs decline up to a point as enrollment increases, reach a minimum, and then rise with further school enrollment size increases. The other major school cost-size relationship form indicates that average costs do not reach a minimum,, but rather decline at a decreasing rate as enrollments increase. The following two sections elaborate on the interaction between these forms, school enrollment size, and cost distribtuion characteristics. The second section focuses on the relation between school size distribution and marginal and variable (or total) costs. Next, the author provides a formal proof of the dispersion-costs relationship presented in terms of a U-shaped marginal costs curve that initially declines and then rises. The paper concludes with a discussion of the analysis policy implications, which include the need to monitor demographic factors likely to influence school enrollment size distribution, and to plan school facilities to respond flexibly to changing enrollment patterns. The paper includes illustrative references to studies of Australian public school systems. (JBM)