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(a) When quantity is expressed as a function of price, what are the Florida demand and supply curves if P = $11, PS = $5, Y = $12,000 billion, T = 75 degrees, PL = $6, and PK = 12.5%. (b) Calculate the surplus or shortage of Florida orange juice when P = $5, $10, and $15. (c) Calculate the market equilibrium price-output combination.

(a) When quantity is expressed as a function of price, what are the Florida demand and supply curves if P = $11, PS = $5, Y = $12,000 billion, T = 75 degrees, PL = $6, and PK = 12.5%. (b) Calculate the surplus or shortage of Florida orange juice when P = $5, $10, and $15. (c) Calculate the market equilibrium price-output combination.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please answer letters a, b, and c.
Florida Orange Juice is a product of Florida's Orange Growers' Association. Demand and supply of the product are both highly sensitive to changes in the weather. During hot summer months, demand for orange juice and other beverages grows rapidly. On the other hand, hot dry weather has an adverse effect on supply by reducing the size of the orange crop. Demand and supply functions for Florida orange juice are as follows: QD = 4,500,000 - 1,200,000P + 2,000,000PS + 1,500Y + 100,000T QS = 8,000,000 + 2,400,000P-500,000PL-80,000PK-120,000T where P is the average price of Florida ($ per case), PS is the average retail price of canned soda ($ per case), Y is income (GNP in $billions), T is the average daily high temperature (degrees), PL is the average price of unskilled labor ($ per hour), and PK is the average cost of capital (in percent). (a) When quantity is expressed as a function of price, what are the Florida demand and supply curves if P = $11, PS = $5, Y = $12,000 billion, T = 75 degrees, PL = $6, and PK = 12.5%. (b) Calculate the surplus or shortage of Florida orange juice when P = $5, $10, and $15. (c) Calculate the market equilibrium price-output combination.
Transcribed Image Text:Florida Orange Juice is a product of Florida's Orange Growers' Association. Demand and supply of the product are both highly sensitive to changes in the weather. During hot summer months, demand for orange juice and other beverages grows rapidly. On the other hand, hot dry weather has an adverse effect on supply by reducing the size of the orange crop. Demand and supply functions for Florida orange juice are as follows: QD = 4,500,000 - 1,200,000P + 2,000,000PS + 1,500Y + 100,000T QS = 8,000,000 + 2,400,000P-500,000PL-80,000PK-120,000T where P is the average price of Florida ($ per case), PS is the average retail price of canned soda ($ per case), Y is income (GNP in $billions), T is the average daily high temperature (degrees), PL is the average price of unskilled labor ($ per hour), and PK is the average cost of capital (in percent). (a) When quantity is expressed as a function of price, what are the Florida demand and supply curves if P = $11, PS = $5, Y = $12,000 billion, T = 75 degrees, PL = $6, and PK = 12.5%. (b) Calculate the surplus or shortage of Florida orange juice when P = $5, $10, and $15. (c) Calculate the market equilibrium price-output combination.
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