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.

Question

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.

Quizplus · Accepted Answer

The Answer of  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.

Assume the Market Is in Equilibrium in the Graph Shown