Asked by Aaron Portillo on May 01, 2024

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If there is an increase in supply,assuming a positively sloped supply curve and a negatively sloped demand curve,total surplus:

A) will increase.
B) will decrease.
C) will remain the same.
D) may change,but we can't tell how.

Positively Sloped

Characterizes a line or curve on a graph that moves upward as one moves from left to right, indicating a direct relationship between two variables.

Negatively Sloped

Describes a downward trend in a graph, indicating an inverse relationship between two variables, such as price and demand.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total benefit to society from the production and consumption of goods or services.

  • Analyze the impact of supply and demand shifts on total surplus.
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CA
Cayla AndrewsMay 03, 2024
Final Answer :
A
Explanation :
An increase in supply will cause a downward pressure on prices, which will increase the quantity demanded. This results in a larger consumer surplus due to the lower prices they pay. Producers will still receive some benefit from the increased quantity supplied because they can still sell more units at a lower price. Therefore, an increase in supply will increase total surplus.