The accompanying diagram represents the market for violins.

Suppose that a new technology allows beginner-level violin producers to make violins at a substantially lower (marginal) cost while retaining the same quality.

a. Use the graph to illustrate the effect that this will have on the supply and demand of beginner-level violins and then answer the following three questions.

b. How much does this new technology increase consumer surplus?

Market for Violins
Quantity of violins (in thousands)
0
10
20
30
40
50
60
70
80
90
100
0
30
60
90
120
150
180
210
240
270
300
S
D

Increase in consumer surplus: $
2400
c. How much does this new technology increase producer surplus?
Increase in producer surplus: $
2400
d. How much does this new technology increase total (or social) surplus?
Increase in total surplus: $
4800