The market for organic cabbage is represented by Q^D = 1,200 - 75P and Q^S = 425P - 300, where P is the price per head of cabbage and Q measures the number of heads of cabbage per week. Suppose the price of organic fertilizer falls, making sellers willing to sell 100 more heads of cabbage per week at every price. What happens to producer and consumer surplus as a result of this change? A) Consumer surplus increases from $6,337.50 to $6,534, and producer surplus increases from $1,116.38 to $1,153.35. B) Consumer surplus increases from $15,000 to $16,200, and producer surplus increases from $4,600 to $7,700. C) Consumer surplus remains unchanged, but producer surplus increases from $351.22 to $454.15. D) Consumer surplus increases from $1,899 to $2,300.25, and producer surplus increases from $1,500.40 to $1,910.05.

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When the price of organic fertilizer falls, the supply curve shifts to the right, resulting in an increase in quantity supplied at every price. The new supply curve can be represented as follows: Q^D = 1,300 - 75P and Q^S = 525P - 300. To find the new equilibrium, we set quantity supplied equal to quantity demanded: 1,300 - 75P = 525P - 300 Thus, P = $6 and Q = 850. To find the new consumer surplus, we need to calculate the area under the demand curve and above the new equilibrium price: CS = ($12 - $6)(850/2) = $3,525 To find the new producer surplus, we need to calculate the area under the price and above the new equilibrium quantity, plus the area of the rectangle formed by the equilibrium price and quantity: PS = ($6)(850 - 700) + ($12 - $6)(150) = $958.33 Therefore, consumer surplus increases from $6,337.50 to $6,534, and producer surplus increases from $1,116.38 to $1,153.35.

The Market for Organic Cabbage Is Represented by QD =

The Market for Organic Cabbage Is Represented by Q^D =