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LeBron James and Kevin Durant enjoy watching Cable TV, a public good. LeBron's demand for Cable TV is Q = 30 - 1/2MB, where Q

LeBron James and Kevin Durant enjoy watching Cable TV, a public good. LeBron's demand for Cable TV is Q = 30 - 1/2MB, where Q is the number of Cable TV channels. Kevin's is Q = 45 - 1/2MB. MB stands for marginal benefit. The marginal cost of getting the street plowed is $60.

  1. In general, is Cable TV an excludable good? Is it non-rival? Explain.
  2. Sketch the individual and aggregate marginal benefit curves and the marginal cost curve.
  3. Calculate the efficient number of Cable TV channels, Q, and identify the efficient point in your graph.
  4. If marginal cost is 10, what is now the efficient number of Q. Graph your answer.

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