Assume the Market Is in Equilibrium in the Graph Shown

question 121

Multiple Choice

Assume the market is in equilibrium in the graph shown at demand D and supply S1 (and a quantity of 5) . If the supply curve shifts to S2, and a new equilibrium is reached (at a quantity of 7) , which of the following is true?

• A) Consumer surplus increases by $5.
• B) Consumer surplus decreases by $5.
• C) Consumer surplus increases by $9.
• D) Consumer surplus decreases by $9.