A change has occurred in the market shown in this graph. What happens to consumer surplus and producer surplus when supply changes as shown in this graph?

A) Consumer surplus decreases; producer surplus decreases.

Explanation:

Consumer Surplus is the difference between the price that consumers pay and the price that they are willing to pay. There is inverse relationship between supply and consumer surplus. An increase in the price due to high low supply, it will reduce consumer surplus, while on the other hand,  a decrease in the price will definitely increase consumer surplus. If a supply is more so the producer surplus is also reduces and vice versa.

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