Homework (eh 06) 2. Price controls in the Florida orange market The following gr

Question

Homework (eh 06) 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 40 35 30 25 20 15 10 l Price 20 (Dollars per box) 480 Quantity Supplied200 uantity Deman (Millions of boxes) (Millions of boxes) 0 80 160 240 320 400 480 660 640 720 800 QUANTITY (Millions of boxes)

Explanation / Answer

a) IN the market the equilibrium price is $25 and the equilibrium quantity is 400.

b) At price 30, the demand will be 320 and the supply will be 600. Pressure will be downward.

at the price of 20, the demand will be 480 and supply will be 200 and pressure will be Upward.

c) "True"

As the equilibrium price is 25, anything below will be binding.  

d) it would result in an increased supply that is more than the short run.

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