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Chapter 13: Q.19 (page 316)

How do public television stations, like PBS, try to overcome the free rider problem?

Short Answer

Expert verified

The problem is dealt by levying a charge to access PBS.

Step by step solution

01

Step 1. Introduction:

A free rider is an individual who does not pay for a public good but is willing to enjoy the benefits of a public good that is financed by other people.

02

Step 2. Explanation:

Public television channels, such as PBS, address the issue of free riding by setting an acceptable price for the product, ensuring that demand generates income from supply. When clients are willing to pay the full price of a product, the free rider problem can be overcome by effectively marketing its products.

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Most popular questions from this chapter

Provide two examples of goods/services that are classified as private goods/services even though they are provided by a federal government.

Radio stations, tornado sirens, light houses, and street lights are all public goods in that all are non-rivalrous and non-exclusionary. Therefore why does the government provide tornado sirens, street lights and light houses but not radio stations (other than PBS stations)?

Assume that the marginal private costs of a firm producing fuel-efficient cars is greater than the marginal social costs. Assume that the marginal private benefits of a firm producing fuel-efficient cars is the same as the marginal social benefits. Discuss one way that the government can try to increase production and sales of fuel efficient cars to the socially desirable amount. Hint: the government is trying to affect production through costs, not benefits.

Why is a football game on ESPN a quasi- public good but a game on the NBC, CBS, or ABC is a public good?

Is it inevitable that government must become involved in supporting investments in new technology?
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