Use the graph input tool to help you answer the following questions. You will no

Question

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 40 500 Quantity Supplied Quant Demanded (Millions of boxes) 210 (Millions of boxes 35 a 30 T 25 20 Demang 10 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Millions of boxes) In this market, the equilibrium price is $ per box, and the equilibrium quantity of oranges is million boxes

Explanation / Answer

In this market equilibrium price is $25 per box, and equilibrium quantity of oranges is 250 million boxes.

Pressure on price has to be answered from drop down menu.

A price ceiling above $25 per box is a binding price ceiling in this market.

False.

Generally the price ceiling is set below the equilibrium price then it is said to be binding price ceiling. But here the price ceiling is set above the market equilibrium hence it is non binding price ceiling.

Assuming that in 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 shortage that is larger in the long run than in the short run.

Price Q D Q S Pressure on Price 15 500 210 Upward 35 0 300 Downward

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