In a normal market, Harvard et al. would have far fewer applicants because most students would know that they don't meet the high standards of acceptance--just like BYU.

But Harvard et al. know that acceptance rate is one of the key factors that goes into school rankings (and, consequently, one of the reasons that BYU is not ranked closer to the elite). So they send our mailers to students with no chance in hades of getting accepted, which are designed to make them feel like they have a chance. Those students waste their time and effort applying, and that's how they keep their acceptance rate so low.

It's shady business that BYU doesn't engage in. BYU is a lot closer to Harvard's admissions standards than Harvard would ever admit to.