If a boxing fight is shown on pay-per-view television every Saturday at 4pm, the demand curve for each fight is given below. If the regulated pay-per-view charge to watch a fight were $5 per household, then what would be the loss in total economic surplus relative to when the there is no charge to watch the fight?

Question

If a boxing fight is shown on pay-per-view television every Saturday at 4pm, the demand curve for each fight is given below.  If the regulated pay-per-view charge to watch a fight were $5 per household, then what would be the loss in total economic surplus relative to when the there is no charge to watch the fight?

Quizplus · Accepted Answer

The loss in total economic surplus would be 1/2 ($5 × 10M)= $25M.

If a Boxing Fight Is Shown on Pay-Per-View Television Every