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Consumer and producer surplus

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Question 5

The diagram below shows the market for high-performance electric bicycles. Originally, the market is in equilibrium with supply curve S1 S_1\,S1​ and demand curve DDD. Following a breakthrough in battery manufacturing technology, the supply curve shifts to S2S_2S2​.

Electric Bicycle Market Diagram

Calculate the increase in consumer surplus resulting from this technological breakthrough.

£90,000£90,000£90,000

£112,500£112,500£112,500

£135,000£135,000£135,000

£202,500£202,500£202,500

Consumer and producer surplus Questions

  1. A Level
  2. /Economics
  3. /Consumer and producer surplus