S₁ and D are the initial supply and demand for donuts. At market price P₁, consumer surplus is the area A + B + C + D, and producer surplus is the area E + F + G.An increase in the manufacturing costs of donuts causes the supply curve to shift leftward from S₁ to S₂. At the new equilibrium price (P₂) and quantity (Q₂), consumer surplus has been reduced to the area A. The new producer surplus is shown by B + E. The net effect of the inward supply shift on producer surplus is negative because downward-sloping demand means the price will rise less than the increase in cost.