Agreed that the quality of the school is really the fundamental determiner of grades. In the original comment I considered adding in a suggestion that a larger school could support more levels of classes, but it felt clunky so I just left it out. Of course, schools can be good and bad for many reasons orthogonal to their size. A small school might be a magnet school drawing the top students of a larger area. Or it might be a rural area which has a hard time recruiting teachers.