10) There are three groups in a community. Their demand curves for public television in hours of programming, T, are given respectively by W₁ = $200-T, W₂=$240-27, W3 = $320 - 27. Suppose public television is a pure public good that can be produced at a constant marginal cost of $200 per hour. a. What is the efficient number of hours of public television? Willingness to Pay Hours Vertical Group 1 (W₁) (7) Sum 100 100 120 260 106 94 108 230 112 88 96 200 118 82 4 84 170 b. How much public television would a competitive private market provide? Group 2 Group 3 (W₂) (W3) 40 28 16
10) There are three groups in a community. Their demand curves for public television in hours of programming, T, are given respectively by W₁ = $200-T, W₂=$240-27, W3 = $320 - 27. Suppose public television is a pure public good that can be produced at a constant marginal cost of $200 per hour. a. What is the efficient number of hours of public television? Willingness to Pay Hours Vertical Group 1 (W₁) (7) Sum 100 100 120 260 106 94 108 230 112 88 96 200 118 82 4 84 170 b. How much public television would a competitive private market provide? Group 2 Group 3 (W₂) (W3) 40 28 16
Chapter8: Market Failure
Section: Chapter Questions
Problem 2P: Draw a standard supply and demand diagram for televisions, and indicate the equilibrium price and...
Related questions
Question
Transcribed Image Text:10) There are three groups in a community. Their demand curves for public television in
hours of programming, T, are given respectively by
W₁ = $200-T,
W₂ = $240-27,
W3 = $320-2T.
Suppose public television is a pure public good that can be produced at a constant
marginal cost of $200 per hour.
a. What is the efficient number of hours of public television?
Willingness to Pay
Group 2 Group 3
Vertical
Hours
(7)
Group 1
(W₁)
(W₂)
(W3)
Sum
100
100
40
120
260
106
94
28
108
230
112
88
16
96
200
118
82
84
170
b. How much public television would a competitive private market provide?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Essentials of Economics (MindTap Course List)
Economics
ISBN:
9781337091992
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics, 7th Edition (MindTap Cou…
Economics
ISBN:
9781285165875
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
