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Assume That Each Day Ten Thousand Children Watch Sesame Street

Question 31

Multiple Choice

Assume that each day ten thousand children watch Sesame Street on public television and that the educational benefits of watching Sesame Street generate private benefits of $100 per child per year and a positive externality of $50 per child per year.No products are advertised on Sesame Street but once a year the stations hold a pledge drive.During pledge drives viewers are asked to make voluntary contributions to the public station in order to keep the programming viable.
Suppose that each parent has just one child who watches Sesame Street.That parent has a private incentive to contribute ____ during the pledge drive.


A) $0
B) $50
C) $100
D) $150

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