The following graph depicts the market for apples from British Columbia, which are sold in units of 9-kilogram boxes. The upward-sloping (orange) line represents supply, and the downward-sloping (blue) line represents demand. Use the Graph Input Tool to help you answer the following questions. You will not be scored on any changes you make to the graph. You can directly change the values in the boxes with the white background by clicking the boxes and typing. The graph and any related values will change accordingly. 21 18 15 14 12 24 PRICE (Dollars per box) 3 0 0 200 400 600 800 1000 1200 QUANTITY (Thousands of boxes) Based on the graph, the equilibrium price is Graph Input Tool MARKET FOR APPLES PRICE (Dollars per box) QUANTITY DEMANDED (Thousands of boxes) 4 1,600 per box, and the equilibrium quantity of apples is QUANTITY SUPPLIED (Thousands of boxes) ? 440 A member of the Legislative Assembly from Saskatoon, facing pressure from constituents alarmed at increases in the price of apple juice, introduces a bill to set a price ceiling of $9 per box of apples. If the market price arbitrarily starts at the price ceiling of $9 per box, the quantity of apples demanded will be boxes, while the quantity of apples supplied will be Therefore, there will be a boxes of apples in this market. In the absence of any price controls, this would exert the market achieves equilibrium. of pressure on apple prices until
The following graph depicts the market for apples from British Columbia, which are sold in units of 9-kilogram boxes. The upward-sloping (orange) line represents supply, and the downward-sloping (blue) line represents demand. Use the Graph Input Tool to help you answer the following questions. You will not be scored on any changes you make to the graph. You can directly change the values in the boxes with the white background by clicking the boxes and typing. The graph and any related values will change accordingly. 21 18 15 14 12 24 PRICE (Dollars per box) 3 0 0 200 400 600 800 1000 1200 QUANTITY (Thousands of boxes) Based on the graph, the equilibrium price is Graph Input Tool MARKET FOR APPLES PRICE (Dollars per box) QUANTITY DEMANDED (Thousands of boxes) 4 1,600 per box, and the equilibrium quantity of apples is QUANTITY SUPPLIED (Thousands of boxes) ? 440 A member of the Legislative Assembly from Saskatoon, facing pressure from constituents alarmed at increases in the price of apple juice, introduces a bill to set a price ceiling of $9 per box of apples. If the market price arbitrarily starts at the price ceiling of $9 per box, the quantity of apples demanded will be boxes, while the quantity of apples supplied will be Therefore, there will be a boxes of apples in this market. In the absence of any price controls, this would exert the market achieves equilibrium. of pressure on apple prices until
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Ab 14
Economic
Transcribed Image Text:The following graph depicts the market for apples from British Columbia, which are sold in units of 9-kilogram boxes. The upward-sloping (orange) line
represents supply, and the downward-sloping (blue) line represents demand.
Use the Graph Input Tool to help you answer the following questions. You will not be scored on any changes you make to the graph. You can directly
change the values in the boxes with the white background by clicking the boxes and typing. The graph and any related values will change accordingly.
PRICE (Dollars per box)
24
21
18
15
12
6
3
0
0
600
QUANTITY (Thousands of boxes)
200
400
800 1000 1200
Based on the graph, the equilibrium price is
Graph Input Tool
MARKET FOR APPLES
PRICE (Dollars per
box)
QUANTITY
DEMANDED
(Thousands of
boxes)
4
1,600
per box, and the equilibrium quantity of apples is
QUANTITY
SUPPLIED
(Thousands of
boxes)
?
440
A member of the Legislative Assembly from Saskatoon, facing pressure from constituents alarmed at increases in the price of apple juice, introduces a
bill to set a price ceiling of $9 per box of apples. If the market price arbitrarily starts at the price ceiling of $9 per box, the quantity of apples
demanded will be
boxes, while the quantity of apples supplied will be
. Therefore, there will be a
boxes of apples in this market. In the absence of any price controls, this would exert
the market achieves equilibrium.
of
pressure on apple prices until
Transcribed Image Text:However, with a price control in place, the market may or may not be able to reach its equilibrium. (Economists call a price ceiling that prevents the
market from reaching equilibrium a binding price ceiling.) Which of the following price ceilings (per box of apples) would be binding in the
previously discussed market? Check all that apply.
$7
$14
$9
Because it takes years before newly planted apple trees bear fruit, the supply curve in the short run is almost vertical. In the long run, farmers can
decide whether to plant apples on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of apples is much
more price sensitive than the short-run supply of apples.
Assuming that the long-run demand for apples is the same as the short-run demand, you would expect the long-run effect of a binding price ceiling on
quantity to be
than the short-run effect.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education