Figure 7-5 -Refer to Figure 7-5. If the Demand Curve Is D

Multiple Choice

Figure 7-5

-Refer to Figure 7-5. If the demand curve is D and the supply curve shifts from S' to S, what is the change in producer surplus?

A) Producer surplus increases by $625.
B) Producer surplus increases by $1,875.
C) Producer surplus decreases by $625.
D) Producer surplus decreases by $1,875.