Following a landmark environmental regulation banning single-use plastic packaging in retail, supermarkets and fast-food chains rushed to source eco-friendly alternatives. This regulatory shift triggered a dramatic surge in market demand for molded-pulp packaging made from wheat straw and bamboo. Manufacturing plants operated continuously to meet the urgent needs of commercial clients. One prominent supplier, Eco-Pack Solutions, reported that the contract price for biodegradable containers rose substantially as the market struggled to align supply with the sudden influx of orders.
Using the information in the case study, explain what impact the change in demand for biodegradable packaging would have had on Eco-Pack Solutions' producer surplus.
