More and more consumers have begun watching their favorite network television programs on their computers. Suppose that initially this service is provided at no charge. Then the writers of these programs file a lawsuit to receive compensation for the programs that are downloaded and viewed on computers. The parties reach a settlement whereby a small fee is charged to access and download an episode of a popular program. For a television network, the marginal cost of supplying the episode to one more customer is zero.
Part 1: Use the infinite line tool to draw the demand curve (Demand) for downloadable television programs.
Part 2: Plot a point that reflects the efficient price and quantity of downloads, and label this point Eopt.
Part 3: Plot a point to indicate a potential price and resulting quantity demanded after the settlement of the lawsuit, and label this point Emkt.