If the popular television show The Bachelor is shown on pay-per-view television every Monday at 9pm, then the demand curve for each episode is given below.
Given that the marginal cost of showing an episode to an additional household is $0:
A. the pay-per-view channel's economic profit will be zero.
B. fewer than the socially optimal number of households will watch each episode.
C. more than the socially optimal number of households will watch each episode
D. the pay-per-view channel will maximize its profit by charging $0 for each episode.
Answer: B
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