Assume the market is in equilibrium in the graph shown at demand D and supply S1 (and a quantity of 5). If the supply curve shifts to S2, and a new equilibrium is reached (at a quantity of 7), which of the following is true?

A. Consumer surplus increases by $9.
B. Consumer surplus decreases by $5.
C. Consumer surplus increases by $5.
D. Consumer surplus decreases by $9.


Answer: A

Economics

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Economics

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Economics