Figure 3.
Three economic diagrams illustrate changes in supply and demand under different improvement scenarios, with price shown on the vertical axis and quantity shown on the horizontal axis. The first diagram shows improved production, where the supply curve shifts outward while the demand curve remains unchanged, resulting in an increase in welfare as indicated by a larger area between the curves. The second diagram shows improved product quality, where the demand curve shifts outward while the supply curve remains unchanged, indicating higher quantity demanded at given price levels. The third diagram shows both improved production and improved product quality, where both the supply and demand curves shift outward simultaneously, leading to higher equilibrium quantity and increased welfare compared to the original position.Three scenarios of consumer and producer surplus expansion