, Price 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 (Dollars per box) 15 45 Quantity Demanded (Millions of boxes) Quantity Supplied (Millions of boxes) 40 500 Supply E 35 * 30 25 Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of boxes) PRICE(Dollars per box) 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. Quantity Demanded (Millions of boxes) Quantity Supplied (Millions of boxes) Price (Dollars per box) Pressure on Prices 30 20 A price ceiling above $25 per box in this market will 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 price ceiling that is set below the equilibrium price to result in a v that is in the long run than in the short run.
, Price 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 (Dollars per box) 15 45 Quantity Demanded (Millions of boxes) Quantity Supplied (Millions of boxes) 40 500 Supply E 35 * 30 25 Demand 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of boxes) PRICE(Dollars per box) 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. Quantity Demanded (Millions of boxes) Quantity Supplied (Millions of boxes) Price (Dollars per box) Pressure on Prices 30 20 A price ceiling above $25 per box in this market will 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 price ceiling that is set below the equilibrium price to result in a v that is in the long run than in the short run.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:, Price
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
(Dollars per box)
15
45
Quantity
Demanded
(Millions of boxes)
Quantity Supplied
(Millions of boxes)
40
500
Supply
E 35
* 30
25
Demand
50 100 150 200 250 300 350 400 450 500
QUANTITY (Millions of boxes)
PRICE(Dollars per box)
Transcribed Image Text: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.
Quantity Demanded
(Millions of boxes)
Quantity Supplied
(Millions of boxes)
Price
(Dollars per box)
Pressure on Prices
30
20
A price ceiling above $25 per box in this market will
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 price ceiling that is set below the
equilibrium price to result in a
v that is
in the long run than in the short run.
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