In this market, the equilibrium price is per box, and the equilibrium quantity of blueberries is million boxes. For each of the prices listed in the following table, determine the quantity of blueberries demanded, the quantity of blueberries supplied, and the direction of pressure exerted on prices in the absence of any price controls.PriceQuantity DemandedQuantity SuppliedPressure on Prices(Dollars per box)(Millions of boxes)(Millions of boxes)15 35 True or False: A price ceiling below $25 per box is not a binding price ceiling in this market.True False Because it takes six to eight years before newly planted blueberry plants reach full production, the supply curve in the short run is almost vertical. In the long run, farmers can decide whether to plant blueberries on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of blueberries is much more price sensitive than the short-run supply of blueberries.Assuming that the long-run demand for blueberries 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. The following graph shows the annual market for Michigan blueberries, which are sold in units of 50-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.**Graph Explanation:**- **Axes:** - The x-axis represents Quantity in millions of boxes. - The y-axis represents Price in dollars per box.- **Supply and Demand Curves:** - The orange line represents the Supply curve, sloping upwards, indicating a direct relationship between price and quantity supplied. - The blue line represents the Demand curve, sloping downwards, indicating an inverse relationship between price and quantity demanded.- **Equilibrium:** - The point where the Supply and Demand curves intersect represents the market equilibrium, where quantity supplied equals quantity demanded.**Graph Input Tool:**- **Market for Michigan Blueberries:** - Adjust the **Price** field to see changes in: - **Quantity Demanded** (currently 174 million boxes). - **Quantity Supplied** (currently 0 million boxes).This tool can help in visualizing how changes in price affect supply and demand in the market for Michigan blueberries.

In general, the price ceiling is considered the maximum price that consumers must pay and producers must accept as stated by the government. However, in the case of a binding price ceiling, the government fixes the price below the equilibrium point, which raises the demand rate creating a shortage in the economy. The given prices are 15 and 35. Plotting the two prices on the graph, we get, At price 35, the quantity demanded is 120, while supplied is 300 units, while at price 15, the quantity demanded is 180 units and the quantity supplied is 0.Therefore, the table can be completed asPriceQuantity demandedQuantity Supplied15180035120300The given statement is False. The reason is that the government only sets a binding price ceiling when the prices are below the given equilibrium price level. Hence, setting the price below $25, which is the equilibrium price in this case, will be considered as binding price ceiling. A binding price ceiling always create a shortage in the supply of goods as the prices are fixed at a level lower than the equilibrium margin. Therefore, the producers will receive lesser amount for their sales, while the consumers gets benefitted from paying lower price margin. Hence, the consumer will demand more and the producer will supply less to reduce their loss margin. Thus, the economy facing shortage in the short run will continue to grow as the economy progresses and with demand remaining the same, in the long run, the economy will experience larger shortage. Thus, the economy facing shortage, will get larger in the long-run. a. The completed table is PriceQuantity demandedQuantity Supplied15180035120300b. The statement is False.c. The economy faces shortage, which is larger in the long run.

Answered: In this market, the equilibrium price…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

In this market, the equilibrium price is

per box, and the equilibrium quantity of blueberries is

million boxes.

For each of the prices listed in the following table, determine the quantity of blueberries demanded, the quantity of blueberries supplied, and the direction of pressure exerted on prices in the absence of any price controls.

Price	Quantity Demanded	Quantity Supplied
(Dollars per box)	(Millions of boxes)	(Millions of boxes)
15
35

True or False: A price ceiling below $25 per box is not a binding price ceiling in this market.

True

False

Because it takes six to eight years before newly planted blueberry plants reach full production, the supply curve in the short run is almost vertical. In the long run, farmers can decide whether to plant blueberries on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of blueberries is much more price sensitive than the short-run supply of blueberries.

Assuming that the long-run demand for blueberries 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.

The following graph shows the annual market for Michigan blueberries, which are sold in units of 50-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.

**Graph Explanation:**

- **Axes:**
- The x-axis represents Quantity in millions of boxes.
- The y-axis represents Price in dollars per box.

- **Supply and Demand Curves:**
- The orange line represents the Supply curve, sloping upwards, indicating a direct relationship between price and quantity supplied.
- The blue line represents the Demand curve, sloping downwards, indicating an inverse relationship between price and quantity demanded.

- **Equilibrium:**
- The point where the Supply and Demand curves intersect represents the market equilibrium, where quantity supplied equals quantity demanded.

**Graph Input Tool:**

- **Market for Michigan Blueberries:**
- Adjust the **Price** field to see changes in:
- **Quantity Demanded** (currently 174 million boxes).
- **Quantity Supplied** (currently 0 million boxes).

This tool can help in visualizing how changes in price affect supply and demand in the market for Michigan blueberries.

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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