Assume the Market Is in Equilibrium in the Graph Shown

question 108

Multiple Choice

Assume the market is in equilibrium in the graph shown at demand D and supply S1 (at 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) Total surplus increases by $12.50.
• B) Total surplus decreases by $12.50.
• C) Total surplus increases by $15.50.
• D) Total surplus decreases by $15.50.

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Definitions:

Interact

To act in such a way as to have an effect on another; in statistical terms, it often refers to variables that affect each other’s outcomes.

Two-way ANOVA

An analytical method used to evaluate how two categorical variables influence a continuous dependent variable.

Treatments

A specific procedure or regimen administered to participants in a scientific study to assess its efficacy or impact.

Randomized Block Design

A statistical experimental design that groups subjects into blocks to account for variability among them and randomly assigns treatments within each block.