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1. There are three groups in a community. Their demand curves for public television in hours of programming, T, are given respectively by W1 =$150T
1. There are three groups in a community. Their demand curves for public television in hours of programming, T, are given respectively by
W1 =$150T W2 =$3602T W3 =$5302T.
Suppose public television is a pure public good that can be produced at a constant marginal cost of $450 per hour.
(a) What is the efficient number of hours of public television?
(b) How much public television would a competitive private market provide?
(c) Show the graph of the demand curve.
(d) Give the MSB, PSB and MPB.
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