Question

Suppose the demand curves for hour-long episodes of Call the Midwife and The Bachelor are shown in the following diagrams. A television network is considering which two programs to add to its upcoming fall lineup. The only time slot available is sponsored by McDonald's, which is under contract to pay the network 10 cents for each viewer. The production costs of the two shows are the same and equal to $250,000 per episode.

a. given that consumers can watch each show for free simply by turning on their televisions, which show will the network choose to add to its fall lineup?
a. the bachelor
b. call the midwife

is this outcome socially efficient? multiple choice
a. no.
b. yes.

Answer 1

Without specific demand curves, we cannot determine which show between Call the Midwife and The Bachelor the network should add for profitability or social efficiency.

Economic concepts of oligopoly and monopoly provided in the question refer to market structures and competition but are not directly applicable to choosing TV programs.

Step-by-step explanation:

To determine which television program a network should add to its lineup, the demand curves for episodes of Call the Midwife and The Bachelor should be considered along with the revenue and production costs.

If McDonald's is paying 10 cents per viewer, the network will choose the show with the higher viewership, assuming production costs are the same. To analyze social efficiency, one must consider factors such as consumer surplus and producer surplus, alongside any externalities that might be present.

However, without the specific demand curves' details, it is not possible to determine which show would attract more viewers and be more profitable for the network. Furthermore, the social efficiency aspect depends on whether the chosen show maximizes the combined surplus for consumers and the network, without causing any negative externalities not accounted for in the transaction.

The information provided in the question prompt about economic market structures such as oligopoly and monopoly does not directly address the television network's decision between two programs.

These concepts are typically more applicable to the analysis of market competition and firm behavior in markets with limited competitors or a single dominant firm.