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

Short Answer

Expert verified

Public television stations, like PBS triumph over the free rider hassle with top-rate memberships and diverse different incentives for all folks who pay.

Step by step solution

01

Concept Introduction

A free rider is someone who wants others to pay for a public suitable however plan to apply the good themselves; if many people act as free riders, the public suitable may never be provided.

02

Explanation

There are a couple of ways that public programming like PBS can use to try to overcome the loose rider trouble, the probably the most effective of which would simply be taxation. So if everybody has to pay a tax, whether or not they use the carrier or not, then there can be no loose riders. however, then you also run into the problem of humans deciding to buy the provider to warn, truly the use of it. So possibly some other manner to do it'd be marketing. And in case you use advertising then the folks who are receiving the blessings are also sitting there watching the classified ads and they are having to take a seat through those commercials this is enforcing, it cost upon them. And it's the money from that advertising which can pay for the general public precisely.

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Most popular questions from this chapter

HighFlyer Airlines wants to build new airplanes with greatly increased cabin space. This will allow HighFlyer Airlines to give passengers more comfort and sell more tickets at a higher price. However, redesigning the cabin means rethinking many other elements of the airplane as well, like engine and luggage placement, and the most efficient shape of the plane for moving through the air. HighFlyer Airlines has developed a list of possible methods to increase cabin space, along with estimates of how these approaches would affect the plane's operating costs and ticket sales. Based on these estimates, Table 13.5 shows the value of R&D projects that provide at least a certain private rate of return. Column 1 = Private Rate of Return. Column 2 = Value of R&D Projects that Return at Least the Private Rate of Return to HighFlyer Airlines. Use the data to answer the following questions.

Private rate of returnValue of R&D
12%\(100
10%\)200
8%\(300
6%\)400
4%$500

a. If the opportunity cost of financial capital for HighFlyer Airlines is 6%, how much should the firm invest in R&D?

b. Assume that the social rate of return for R&D is an additional 2% on top of the private return; that is, an R&D investment that had a 7% private return to HighFlyer Airlines would have a 9% social return. How much investment is socially optimal at the 6% interest rate?

What is the free rider problem?

What are the two key characteristics of public goods?

The Junkbuyers Company travels from home to home, looking for opportunities to buy items that would otherwise end up with the garbage, but which the company can resell or recycle. Which will be larger, the private or the social benefits?

Can a company be guaranteed all of the social

benefits of a new invention? Why or why not?

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