The following figure shows the market for apartments in Causeway Bay. (Both dema...
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The following figure shows the market for apartments in Causeway Bay. (Both demand and supply curves are linear)
The government thinks the rent is too high and implements a rent ceiling of $1,000. What is the value of consumer surplus and producer surplus respectively after the price ceiling has been implemented? (Assume that the production is allocated to the lowest cost producers and the consumption is allocated to the highest value consumers.)
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