Commercial radio stations are private firms that produce and broadcast programs without assistance from the government.

a What type of good is a radio program? Explain your answer with reference to the categories in Figure 11.1.

b Explain why commercial radio stations may not produce programs that maximise welfare.

c Explain how adding a government-funded radio station to the market can increase welfare.

d Suppose that the government requires the government-funded radio station to cover a part of its operating costs from advertising revenue. Would this change your answer to part (c)?