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Suppose That the Marginal Cost of Providing Public Television Service

Question 98

Multiple Choice

Suppose that the marginal cost of providing public television service to one more viewer is zero.If this service is provided to each viewer at a price equal to its marginal cost,


A) the television station will have an incentive to provide the optimal level of programming.
B) Total revenues will be zero.
C) Total revenues will be positive when there are few viewers,but will decline as more viewers tune in.
D) The television station will earn zero economic profit.

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