Public television has trouble raising money for its services. This problem exists because:

the services it provides have less value than their costs.
of moral hazard.
public television is a good example of a signaling/screening problem.
television is a public good.


Suppose that three producers are competing for a set of resources. Producer A can turn these resources into goods worth $20.00 to consumers (product A), Producer B can turn them into goods worth $22.00 (product B), and Producer C can turn them into goods worth $25.00 (product C).

Products A and C are public goods. The total value of each is equally divided among twenty different consumers. B is a private good. In this case, which good can we expect to see produced in the market?

Product A
Product B
Product C
All have an equal chance of being produced.


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