Assume the Market Depicted in the Graph Is in Equilibrium

question 130

Multiple Choice

Assume the market depicted in the graph is in equilibrium at demand (D) and supply (S₁) . If the supply curve shifts to S₂, and a new equilibrium is reached, which of the following is true?

• A)Consumer surplus increases, but producer surplus decreases.
• B)Consumer surplus decreases, but producer surplus increases.
• C)Both consumer and producer surplus increase.
• D)Both consumer and producer surplus decrease.

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Definitions:

Evaluating

Assessing or determining the value, nature, character, or quality of something through careful consideration.

Scientific

Pertaining to or based on the methods and principles of science, involving systematic observation, experimentation, and evidence.

Neo-Freudian

Pertains to theories and psychologists who accepted the basic tenets of Freud's psychoanalysis but adapted and expanded upon them in various ways.

Unconscious

The unconscious mind consists of processes in the mind that occur automatically and are not available to introspection, influencing behaviors and feelings.