The market supply of commodity Z remains unchanged at Qs= -200+ 5p. As the price of the substitute increases, the demand changes. The new demand is Qd= 1000-5p and the quantity demanded was 800 units when the price was zero before the increase in the price of the substitute. The effect on the economic surplus due to the increase in the price of the substitute is,3200 is more.14000 is reduced14000 is more28000 is reducednone of the above.

The question seems to be asking for the effect on the economic surplus due to the increase in the price of a substitute good. To answer this, we need to find the new equilibrium price and quantity after the change in demand, and then compare the economic surplus before and after the change.

Step 1: Find the initial equilibrium price and quantity Set Qs = Qd to find the equilibrium price (p) and quantity (Q). -200 + 5p = 1000 - 5p 10p = 1200 p = 1200 / 10 = 120 Substitute p = 120 into either the supply or demand equation to find Q. Let's use the demand equation: Q = 1000 - 5*120 = 1000 - 600 = 400

Step 2: Find the new equilibrium price and quantity after the change in demand The new demand equation is Qd = 800 - 5p. Set Qs = Qd to find the new equilibrium price and quantity. -200 + 5p = 800 - 5p 10p = 1000 p = 1000 / 10 = 100 Substitute p = 100 into the new demand equation to find Q: Q = 800 - 5*100 = 800 - 500 = 300

Step 3: Calculate the change in economic surplus The economic surplus is the sum of consumer surplus and producer surplus. The consumer surplus is the area above the price line and below the demand curve, while the producer surplus is the area below the price line and above the supply curve. In this case, both the consumer and producer surplus decrease due to the decrease in price and quantity, so the economic surplus also decreases.

The exact change in economic surplus depends on the specific shapes of the supply and demand curves, which are not given in the question. Therefore, without additional information, we cannot determine the exact change in economic surplus and cannot select an answer from the given options.