(Solved): 12. Disequilibrium - Price ceilings The following graph shows the annual market for Florida oranges ...

12. Disequilibrium - Price ceilings 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 Price 15 Supply (Dollars per box) 900 Quantity Demanded (Millions of boxes) Quantity Supplied (Millions of boxes) per box, and the equilibrium quantity of oranges is million boxes. PRICE (Dollars per box) 22222222 50 45 40 35 30 25 Demand 0 90 180 270 300 450 540 630 720 810 900 QUANTITY (Millions of boxes) In this market, the equilibrium price is s 20 15 10 5 0 378 For each price 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 Quantity Supplied Price (Dollars per box) (Millions of boxes) (Millions of boxes) Pressure on Prices 20 30 True or False: A price ceiling below $25 per box is a binding price ceiling in this market. (Economists call a price celling that prevents the market from reaching equilibrium a binding price ceiling.). True False 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 binding price ceiling to result in a in the long run than in the short run. that is