Assume the Market Is in Equilibrium in the Graph Shown

question 132

Multiple Choice

Assume the market is in equilibrium in the graph shown at demand D and supply S1.If the supply curve shifts to S2,and a new equilibrium is reached,equilibrium quantity will increase from 4 to 4.5 units.Which of the following is true?

• A) Producer surplus increases by $3.00.
• B) Producer surplus decreases by $8.50.
• C) Producer surplus increases by $7.50.
• D) Producer surplus decreases by $16.

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