Homework Answers
Answer
The increase in the price of substitute goods increases the demand
for the other good which shifts the demand curve to the right and
increases price and quantity in the market which increases total
surplus in the market.
Total surplus =0.5*(y-axis intercept of the demand - y-axis intercept of the supply curve)*Q
the demand curve shifts outward so the intercept increases and the quantity increases so the total surplus increases.
Option b
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