The following calculator depicts the market for oranges from Florida, which are sold in units of...

 

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The following calculator depicts the market for oranges from Florida, which are sold in units of 90-pound boxes. The upward-sloping (orange) line represents supply, and the downward-sloping (blue) line represents demand. Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator. Tool tip: Use your mouse to drag the horizontal green line on the graph. The values in the boxes on the right side of the calculator will change accordingly. You also can directly change the values in the boxes with the white background by clicking in the box and typing. The graph and any related values will change accordingly. PRICE (Dollars per box 24 + 21- 18 15 12 & 3- 100 600 200 300 400 500 QUANTITY (Millions of boxes per yearl $6 $16 MARKET FOR ORANGES Price IDollars per box Based on the graph, in this market, the equilibrium price is oranges is boxes per year. ☐ $9 Quantity Demanded IMillions of boxes per yearl 700 Quantity Supplied Millions of boxes per yearl Resel to initial Values 233 Calculate per box, and the equilibrium quantity of A congressman from New York, facing pressure from constituents alarmed at increases in the price of orange juice, introduces a bill to set a price ceiling of $9 per box of oranges. If the market price arbitrarily starts at the price ceiling of $9 per box, the quantity of oranges demanded will be boxes per year, while the quantity of oranges supplied will be boxes per year. Therefore, there will be boxes of oranges in this market per year. In the absence of any price controls, this would exert pressure on orange prices until the market achieves equilibrium. 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 effective price ceiling.) Which of the following price ceilings (per box of oranges) would be effective in the previously discussed market? Check all that apply. 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 the long-run effect of an effective price ceiling on quantity supplied to be than the short-run effect. The following calculator depicts the market for oranges from Florida, which are sold in units of 90-pound boxes. The upward-sloping (orange) line represents supply, and the downward-sloping (blue) line represents demand. Use the calculator to help you answer the following questions. You will not be graded on any changes you make to the calculator. Tool tip: Use your mouse to drag the horizontal green line on the graph. The values in the boxes on the right side of the calculator will change accordingly. You also can directly change the values in the boxes with the white background by clicking in the box and typing. The graph and any related values will change accordingly. PRICE (Dollars per box 24 + 21- 18 15 12 & 3- 100 600 200 300 400 500 QUANTITY (Millions of boxes per yearl $6 $16 MARKET FOR ORANGES Price IDollars per box Based on the graph, in this market, the equilibrium price is oranges is boxes per year. ☐ $9 Quantity Demanded IMillions of boxes per yearl 700 Quantity Supplied Millions of boxes per yearl Resel to initial Values 233 Calculate per box, and the equilibrium quantity of A congressman from New York, facing pressure from constituents alarmed at increases in the price of orange juice, introduces a bill to set a price ceiling of $9 per box of oranges. If the market price arbitrarily starts at the price ceiling of $9 per box, the quantity of oranges demanded will be boxes per year, while the quantity of oranges supplied will be boxes per year. Therefore, there will be boxes of oranges in this market per year. In the absence of any price controls, this would exert pressure on orange prices until the market achieves equilibrium. 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 effective price ceiling.) Which of the following price ceilings (per box of oranges) would be effective in the previously discussed market? Check all that apply. 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 the long-run effect of an effective price ceiling on quantity supplied to be than the short-run effect.

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