Question: The cable television industry is facing competition from companies using advanced technologies. The use of satellites allows programs to be beamed at low cost to

The cable television industry is facing competition from companies using advanced technologies. The use of satellites allows programs to be beamed at low cost to locations not accessed by cable. This technology could eliminate the need for the current high-fixed-cost, physically intrusive cable systems. What information do cable companies need to evaluate the potential of satellite TV? What is a limitation associated with estimating demand for satellite TV? Why don’t cable companies just wait and see whether satellite TV is a success?

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