Demand Shift Increases Both Surpluses

Steps:

• Demand shifts right from D0 to D1, raising equilibrium price from P0 to P1 and quantity from Q0 to Q1.
• Consumer surplus is the area below D1 and above P1, up to Q1.
• Producer surplus is the area above supply curve S and below P1, up to Q1.
• Label areas: FMH matches CS triangle; HMK matches PS triangle.

Why A is correct:

• A identifies FMH as the CS triangle (value above price per unit) and HMK as the PS triangle (cost below price per unit), per surplus definitions.

Why the others are wrong:

• B: OKMT overstates PS by including area below supply (inefficiency, not surplus).
• C: GNJ and HNJ mislabel areas; GNJ is below D0, not new CS.
• D: Incomplete and fails to specify correct areas.

Final answer: A