Suppose the New York city mayor hires Aeon Insights to evaluate the city's existing rent control policy. Specifically, the city would like to know whether the policy benefits low-income earners in finding affordable apartments. This project has been assigned to you. The city provides you with the following information: Demand for apartments: P = 4,000 - 2Q Supply of apartments: P = 500 + 3Q, where P is the monthly rent and Q is the number of one-bedroom units. Policy #1: No rent control, the equilibrium corresponds to demand = supply. Policy #2: Rent control set at $1,700. The social surplus (SS) under Policy #1 is equal to ________ and the SS under Policy #2 is equal to ________.

a.$1,225,000; $1,000,000

b.$1,225,000; $1,322,500

c.$735,000; $700,000

d.$735,000; $488,000

You realize that while the rent control policy can benefit the renters who manage to rent such apartments, there is no guarantee that these renters are low-income earners. In fact, you suspect that the potential renters are likely to offer incentives (or bribes) to the landlords in order to be chosen as tenants. Assume that the landlords cannot identify the willingness to pay of each potential renter and the landlords only know the general market information provided by the demand curve (that is, no price discrimination). The maximum total bribe that the landlords can extract from the potential renters is ___________. Suppose the renters do pay this bribe to the landlords under Policy #2. The SS is equal to __________.

a.$600,000; $1,000,000

b.$300,000; $700,000

c.$600,000; $400,000

d.$300,000; $1,000,000