Optons Attempts: 2. Price controls in the Florida orange market The following gr

Question

Optons Attempts: 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. Keep the Highest: /4 Use the graph input tool to help you answer the foWowing questions. You wil 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 Price (Dollars per box) 15 900 Quantity Supplied (Miions of boxes) (MWions of baxes) 15 90 tao 270 360 450 540 600 720 810 " o QUANTITY (Millions of boxes) In this market, the equilibrium price is 5 per box, and the equilibvium 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 dire pressure exerted on prices in the absence of any price controls Price Quantity Demanded Quantity Supplied Student Que

Explanation / Answer

Equilibrium condition:Demand = supply.

Equilibrium is attined at the point where demand and supply curve interest each other.This is at price=$25 and quantity=450.

At price=$35

Demand=0 and supply=900

There is excess supply on this market.Equilibrium can be attained only in price falls.There is DOWNWARD pressure on price.

A price ceiling which is more than the equilibrium price($25) is non binding.This is because transactions are already taking place at $25.So,maximum price of more than $25 would be ineffective.

Answer-False.

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