If the popular television show The Bachelor is shown on pay-per-view television every Monday at 9pm, then the demand curve for each episode is given below. If each episode were shown for free, total economic surplus would be ________.

Question

If the popular television show The Bachelor is shown on pay-per-view television every Monday at 9pm, then the demand curve for each episode is given below.  If each episode were shown for free, total economic surplus would be ________.

Quizplus · Accepted Answer

Economic surplus is given by the area of the triangle under the demand curve up the to the equilibrium quantity. If the program were free, there would be 80 million viewing households, so economic surplus would be 1/2 ($50 × 80M)= $2000M.

If the Popular Television Show the Bachelor Is Shown on Pay-Per-View