The demand curve for new movies shown on TV is plotted in the graph below:
If the new movie is shown for free,what is the economic surplus?

Question

The demand curve for new movies shown on TV is plotted in the graph below: 
If the new movie is shown for free,what is the economic surplus?

Quizplus · Accepted Answer

The economic surplus is the total area of the triangle that is formed by the demand curve and the x-axis. The base of the triangle is 160 million (80 million units x $2 per unit) and the height is 25. The area of the triangle is therefore 0.5 x 160 million x 25 = $2000 million. Therefore, if the new movie is shown for free, the economic surplus will be $2000 million. This is the best choice as it maximizes the economic surplus.

The Demand Curve for New Movies Shown on TV Is