Programs such as Steam distribute more and more video games. Purchasers buy the game and download it immediately to their computer. If the entire system is automated, estimate the marginal cost of producing and selling video games this way (ignore electricity costs).
A) zero
B) the price of the game
C) proportional to the cost to make the game
D) None of the answers is correct.

Question

Quizplus · Accepted Answer

Once the game has been developed and put on the distribution platform, the cost of producing and selling each additional game is essentially zero. There are no incremental costs associated with producing additional copies, as the game is simply downloaded onto the purchaser's device. Hence, the marginal cost is zero.

Programs Such as Steam Distribute More and More Video Games