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 decreases by $16.
B. Producer surplus increases by $7.50.
C. Producer surplus increases by $3.00.
D. Producer surplus decreases by $8.50.
Answer: C
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Answer the following statement true (T) or false (F)
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