Answered: The following graph shows the annual…

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 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)
35
15

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

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.

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
Price
(Dollars per box)
15
40
Quantity
Demanded
Quantity Supplied
(Millions of boxes)
Supply
500
0
35
(Millions of boxes)
30
25
20
Demand
15
10
5
0
0
50 100 150 200 250 300 350 400 450 500
QUANTITY (Millions of boxes)
PRCE (Dollars per box)

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