Picture 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 increase from 4 to 4.5 units.
Which of the following is true?
-Producer surplus increases by $8.50.
-Producer surplus decreases by $8.50.
-Producer surplus increases by $7.50.
-Producer surplus decreases by $16.