2. Price controls in the Florida orange marketThe 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. Graph Input ToolMarket for Florida Oranges5045I Price(Dollars per box)15Supply40QuantityDemanded(Millions of boxes)Quantity Supplied(Millions of boxes)90037835302520Demand151090 180 270 360 450 540 630 720 810 900QUANTITY (Millions of boxes)In this market, the equilibrium price is $per box, and the equilibrium quantity of oranges ismillion boxes.For each of the prices listed in the following table, determine the quantity of oranges demanded, the quantity of oranges supplied, and the direction ofpressure exerted on prices in the absence of any price controls.PriceQuantity DemandedQuantity Supplied(Dollars per box)(Millions of boxes)(Millions of boxes)Pressure on Prices1535True or False: A price ceiling below $25 per box is not a binding price ceiling in this market.TrueO FalseBecause 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, farmerscan 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 ismuch 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 athat isin the long run than in the short run.PRICE (Dollars per box)

A binding price ceiling occurs when the Government sets the goods price below equilibrium. It is…

Answered: Market for Florida Oranges 50 45 I…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. 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.

Graph Input Tool
Market for Florida Oranges
50
45
I Price
(Dollars per box)
15
Supply
40
Quantity
Demanded
(Millions of boxes)
Quantity Supplied
(Millions of boxes)
900
378
35
30
25
20
Demand
15
10
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 of the prices 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
Quantity Demanded
Quantity Supplied
(Dollars per box)
(Millions of boxes)
(Millions of boxes)
Pressure on Prices
15
35
True or False: A price ceiling below $25 per box is not a binding price ceiling in this market.
True
O 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.
PRICE (Dollars per box)

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Follow-up Question

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.

08016024032040048056064072080050454035302520151050PRICE (Dollars per box)QUANTITY (Millions of boxes)Demand Supply

Graph Input Tool

Market for Michigan Blueberries
Price (Dollars per box)
Quantity Demanded (Millions of boxes)		Quantity Supplied (Millions of boxes)

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 above $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.

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