Assume the Market Is in Equilibrium in the Graph Shown

question 36

Multiple Choice

Assume the market is in equilibrium in the graph shown at demand D and supply S₂ (at a quantity of 6) . If the supply curve shifts to S₁, and a new equilibrium is reached (at a quantity of 4) , which of the following is true?

• A) Total surplus would increase by $7.50.
• B) Total surplus would decrease by $16.50.
• C) Total surplus would increase by $32.
• D) Total surplus would decrease by $14.00.

---

Definitions:

System

A set of connected elements or components that function together as a complex whole, often described in terms of inputs, processes, outputs, and feedback.

Customer

An individual or organization that purchases goods or services from another entity, typically playing a vital role in the entity's revenue stream.

Little's Law

A mathematical principle in queueing theory stating that, in a stable system, the long-term average number of items in the system is equal to their long-term average arrival rate multiplied by their average time in the system.

Average Number

The central value of a set of numbers, calculated by dividing the sum of all numbers by the count of those numbers.