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2) Consider the market for coffee which is supposed to be in equilibrium (free market). Draw a figure and depict the areas that refer to
2) Consider the market for coffee which is supposed to be in equilibrium (free market). Draw a figure and depict the areas that refer to consumer and producer surplus. Suppose now, that the U.S. government introduces a price ceiling which is below the original equilibrium price. Draw a figure and depict the areas that refer to
a) consumer surplus
b) producer surplus
c) income transfer
d) deadweight loss
under the price ceiling regime.
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