Final answer:
The entry of a new cookie producer increases supply (S) in the market, represented by a rightward shift of the supply curve, and does not simply increase the quantity supplied (Qs) at the current prices.
Step-by-step explanation:
When a new producer of cookies enters the industry, the market experiences a change in the supply of cookies. As the new producer begins making cookies, they add to the total amount of cookies available in the market.
This situation is represented by an increase in supply, meaning the supply curve shifts to the right.
The correct answer to what changes in the market is that supply (S) increases.
This is because the new producer is now contributing to the overall market, and not because the existing producers are making more at the current prices.
An increase in the quantity supplied (Qs) would mean that the existing producers are supplying more due to a change, such as an increase in price.
Using the equation Qs = 2 + 5P, if this were the supply equation for cookies and a new producer entered the market, the effect would be modeled as a new supply function with a higher intercept or steeper slope, depending on how the new producer affects the market.