10. Price controls in the Florida orange market The following graph shows the annual market for Florida oranges, which are sold in units of 90-pound boxes. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per box) 50 Graph Input Tool Market for Florida Oranges Supply Price 20 (Dollars per box) 40 35 30 25 Quantity Demanded 486 Quantity Supplied (Millions of boxes) 360 (Millions of boxes) 20 15 10 5 0 Demand 90 180 270 360 450 540 630 720 810 900 QUANTITY (Millions of boxes) In this market, the equilibrium price is $ per box, and the equilibrium quantity of oranges is million boxes. ? For each price listed in the following table, determine the quantity of oranges demanded, the quantity of oranges supplied, and the direction of pressure exerted on prices in the absence of any price controls. Price (Dollars per box) 15 35 Quantity Demanded Quantity Supplied (Millions of boxes) (Millions of boxes) Pressure on Prices True or False: A price ceiling above $25 per box is not a binding price ceiling in this market. (Economists call a price ceiling that prevents the market from reaching equilibrium a binding price ceiling.) True False Because it takes many years before newly planted orange trees bear fruit, the supply curve in the short run is almost vertical. In the long run, farmers can decide whether to plant oranges on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of oranges is much more price sensitive than the short-run supply of oranges. Assuming that the long-run demand for oranges is the same as the short-run demand, you would expect a binding price ceiling to result in a that is in the long run than in the short run.
10. Price controls in the Florida orange market The following graph shows the annual market for Florida oranges, which are sold in units of 90-pound boxes. Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph. Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly. PRICE (Dollars per box) 50 Graph Input Tool Market for Florida Oranges Supply Price 20 (Dollars per box) 40 35 30 25 Quantity Demanded 486 Quantity Supplied (Millions of boxes) 360 (Millions of boxes) 20 15 10 5 0 Demand 90 180 270 360 450 540 630 720 810 900 QUANTITY (Millions of boxes) In this market, the equilibrium price is $ per box, and the equilibrium quantity of oranges is million boxes. ? For each price listed in the following table, determine the quantity of oranges demanded, the quantity of oranges supplied, and the direction of pressure exerted on prices in the absence of any price controls. Price (Dollars per box) 15 35 Quantity Demanded Quantity Supplied (Millions of boxes) (Millions of boxes) Pressure on Prices True or False: A price ceiling above $25 per box is not a binding price ceiling in this market. (Economists call a price ceiling that prevents the market from reaching equilibrium a binding price ceiling.) True False Because it takes many years before newly planted orange trees bear fruit, the supply curve in the short run is almost vertical. In the long run, farmers can decide whether to plant oranges on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of oranges is much more price sensitive than the short-run supply of oranges. Assuming that the long-run demand for oranges is the same as the short-run demand, you would expect a binding price ceiling to result in a that is in the long run than in the short run.
Chapter1: Making Economics Decisions
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Transcribed Image Text:10. Price controls in the Florida orange market
The following graph shows the annual market for Florida oranges, which are sold in units of 90-pound boxes.
Use the graph input tool to help you answer the following questions. You will not be graded on any changes you make to this graph.
Note: Once you enter a value in a white field, the graph and any corresponding amounts in each grey field will change accordingly.
PRICE (Dollars per box)
50
Graph Input Tool
Market for Florida Oranges
Supply
Price
20
(Dollars per box)
40
35
30
25
Quantity
Demanded
486
Quantity Supplied
(Millions of boxes)
360
(Millions of boxes)
20
15
10
5
0
Demand
90 180 270 360 450 540 630 720 810 900
QUANTITY (Millions of boxes)
In this market, the equilibrium price is $
per box, and the equilibrium quantity of oranges is
million boxes.
?
For each price listed in the following table, determine the quantity of oranges demanded, the quantity of oranges supplied, and the direction of
pressure exerted on prices in the absence of any price controls.
Price
(Dollars per box)
15
35
Quantity Demanded
Quantity Supplied
(Millions of boxes)
(Millions of boxes) Pressure on Prices
True or False: A price ceiling above $25 per box is not a binding price ceiling in this market. (Economists call a price ceiling that prevents the market
from reaching equilibrium a binding price ceiling.)
True
False
Because it takes many years before newly planted orange trees bear fruit, the supply curve in the short run is almost vertical. In the long run, farmers
can decide whether to plant oranges on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of oranges is
much more price sensitive than the short-run supply of oranges.
Assuming that the long-run demand for oranges is the same as the short-run demand, you would expect a binding price ceiling to result in a
that is
in the long run than in the short run.
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