Assume the market depicted in the graph is in equilibrium at demand (D) and supply (S₁). If the supply curve shifts to S₂, and a new equilibrium is reached, which of the following is true? A) Producer surplus increases and total surplus increases. B) Producer surplus decreases and total surplus increases. C) Producer surplus increases and total surplus decreases. D) Producer surplus decreases and total surplus decreases.

Question

Quizplus · Accepted Answer

The Answer of Assume the market depicted in the graph is in equilibrium at demand (D) and supply (S₁). If the supply curve shifts to S₂, and a new equilibrium is reached, which of the following is true? A) Producer surplus increases and total surplus increases. B) Producer surplus decreases and total surplus increases. C) Producer surplus increases and total surplus decreases. D) Producer surplus decreases and total surplus decreases.

Assume the Market Depicted in the Graph Is in Equilibrium