1. Introduction To Media Economics

Question 1

What are the main topics discussed in Media Economics?

Answer 1

Media Economics covers issues such as international trade, business strategy, pricing policies, competition, and industrial concentration as they affect media firms and industries

Question 2

Define microeconomics

Answer 2

Analysis of individual markets, products, and firms, examining resource allocation and production/consumption decisions

Question 3

Define macroeconomics

Answer 3

Study of broad economic aggregates like total output, employment, national income, and the overall economy’s growth rate

Question 4

What are the unique characteristics of media firms?

Answer 4

They are driven by various motives (profit, philanthropy, public influence), the institutional structures influence the firm’s priorities, and they often enjoy increasing marginal returns due to intangible outputs

Question 5

Define profits

Answer 5

Financial gains after deducting costs from revenues

Question 6

Define revenues

Answer 6

Total earnings of a firm

Question 7

Define costs

Answer 7

Expenses incurred in producing goods or services, including opportunity costs

Question 8

Define perfect competition

Answer 8

When there are many sellers, homogenous goods, and no market power

Question 9

Define monopoly

Answer 9

When a single firm has control over the market, there’s no competition, and there’s high entry barriers

Question 10

Define oligopoly

Answer 10

When there are few sellers, some competition, and differentiated or homogenous products

Question 11

What distinguishes Media Economics?

Answer 11

Media output defies the law of scarcity, they are driven by alternative motives (other than just profit), they can redistribute resources and produce more for the same cost

Question 12

What are the key economic characteristics of the media?

Answer 12

Operates in a dual product market (sells content to audiences and audiences to advertisers), gets revenue from advertising, cultural goods (intangible value)

Question 13

Explain economies of scale

Answer 13

Lower marginal costs than average costs, initial high production costs, low marginal reproduction costs, average cost decreases as audience scales

Question 14

Explain economies of scope

Answer 14

Savings and efficiencies from multi-product production, cost-effective to produce and sell related products jointly, enables diversification