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Five networks are vying to receive the payper-view broadcast rights to the World Series of Yahtzee. Each estimates that the inverse demand for watching this nail-biter of an event is given by P = 100 - 0.01Q. Each can provide the broadcast at a constant marginal cost of $1 per viewer.
a. Calculate the deadweight loss of monopoly in the market for the televised Yahtzee tournament.
b. Suppose that tournament Yahtzee's governing body plans to select one network at its discretion to air the tournament. How much will each network be willing to spend lobbying for the broadcast rights?
c. Explain why, in this situation, the losses to society are much greater than just the deadweight losses of monopoly.
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