What number of hours of live broadcasts should NPR raise funds for?

NPR (i.e., National Public Radio) is in the middle of its fall fundraising campaign. NPR is trying to determine the number of hours per month of live radio broadcasts (versus taped) that they should provide. The cost of providing one hour of taped broadcast is zero, while the marginal cost of an hour of live radio broadcast is 30 (in thousands). You have been asked to advise NPR in this fundraising campaign.

From your research, you find that there are three main groups of listeners and you have constructed the following demand curves for the listeners:

P_A = 500 - 2Q
P_B = 300 - Q
P_C = 400 - 2Q

where Q = number of hours of live broadcasts per month, and P = price or value per hour (in thousands).

What number of hours of live broadcasts should NPR raise funds for?

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Expert Solution

Rahul Sunny answered 1 year ago

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