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 $15 per household, then ________ households would watch the fight, and the loss is total economic surplus would be ________ relative to when 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 $15 per household, then ________ households would watch the fight, and the loss is total economic surplus would be ________ relative to when there is no charge to watch the fight.

Quizplus · Accepted Answer

At a price of $15, 20 million households would watch the fight. Relative to when the fight is show free of charge, the loss in total economic surplus would be 1/2 ($15 × 30M)= $225M.

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