Answer: 1) PRODUCER SURPLUS RECIEVED BY EXISTING SELLERS INCREASES
Explanation:
Producer Surplus is the difference between - actual price recieved by seller per unit of product and the minimum price inducing the seller to suppy that product .
Graphically , It is the area above upward sloping supply curve and below the actual price level .
When demand increases - downward sloping demand curve shifts rightwards . It creates excess demand & creates competition among buyers which increases price & contracts new demand , expands supply .
The new equilibrium is created at higher equilibrium price & quantity .
This increases the producer surplus - by rising the price & hence distance between price , supply curve (same unchanged)
