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Imagine a hypothetical market where identical, unbranded ice cream are sold by numerous producers.

The equilibrium is established by market demand and supply, resulting in a Q1 quantity of ice cream being sold at a price of P1. The initial consumer surplus and producer surplus are illustrated on the graph.

As more consumers become health-conscious, the demand for ice cream decreases. So, the demand curve shifts to the left.  As a result, the equilibrium price and quantity fall.

The new producer surplus is smaller than before, indicating a reduction in the producer surplus.

Consumer surplus experiences opposing effects. Consider the new consumer surplus and the initial consumer surplus. A portion of the initial consumer surplus is lost. However, a portion of the initial producer surplus is shifted to the new consumer surplus.  The net impact on consumer surplus after a decrease in demand is indeterminate.

Conversely, an increase in demand leads to a rise in producer surplus. While a portion of the initial consumer surplus is lost, an additional area is included in the new consumer surplus. The net effect on consumer surplus remains indeterminate.