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The following graph depicts the market for apples from British Columbia, which are sold in units of 9-kilogram boxes. The upward-sloping (orange) line represents supply, and the downward-sloping (blue) line represents demand. Use the Graph Input Tool to help you answer the following questions. You will not be scored on any changes you make to the graph. You can directly change the values in the boxes with the white background by clicking the boxes and typing. The graph and any related values will change accordingly. 21 18 15 14 12 24 PRICE (Dollars per box) 3 0 0 200 400 600 800 1000 1200 QUANTITY (Thousands of boxes) Based on the graph, the equilibrium price is Graph Input Tool MARKET FOR APPLES PRICE (Dollars per box) QUANTITY DEMANDED (Thousands of boxes) 4 1,600 per box, and the equilibrium quantity of apples is QUANTITY SUPPLIED (Thousands of boxes) ? 440 A member of the Legislative Assembly from Saskatoon, facing pressure from constituents alarmed at increases in the price of apple juice, introduces a bill to set a price ceiling of $9 per box of apples. If the market price arbitrarily starts at the price ceiling of $9 per box, the quantity of apples demanded will be boxes, while the quantity of apples supplied will be Therefore, there will be a boxes of apples in this market. In the absence of any price controls, this would exert the market achieves equilibrium. of pressure on apple prices until

The following graph depicts the market for apples from British Columbia, which are sold in units of 9-kilogram boxes. The upward-sloping (orange) line represents supply, and the downward-sloping (blue) line represents demand. Use the Graph Input Tool to help you answer the following questions. You will not be scored on any changes you make to the graph. You can directly change the values in the boxes with the white background by clicking the boxes and typing. The graph and any related values will change accordingly. 21 18 15 14 12 24 PRICE (Dollars per box) 3 0 0 200 400 600 800 1000 1200 QUANTITY (Thousands of boxes) Based on the graph, the equilibrium price is Graph Input Tool MARKET FOR APPLES PRICE (Dollars per box) QUANTITY DEMANDED (Thousands of boxes) 4 1,600 per box, and the equilibrium quantity of apples is QUANTITY SUPPLIED (Thousands of boxes) ? 440 A member of the Legislative Assembly from Saskatoon, facing pressure from constituents alarmed at increases in the price of apple juice, introduces a bill to set a price ceiling of $9 per box of apples. If the market price arbitrarily starts at the price ceiling of $9 per box, the quantity of apples demanded will be boxes, while the quantity of apples supplied will be Therefore, there will be a boxes of apples in this market. In the absence of any price controls, this would exert the market achieves equilibrium. of pressure on apple prices until

Microeconomics: Principles & Policy
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter1: What Is Economics?
Section1.A: Appendix Using Graphs: A Review
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The following graph depicts the market for apples from British Columbia, which are sold in units of 9-kilogram boxes. The upward-sloping (orange) line represents supply, and the downward-sloping (blue) line represents demand. Use the Graph Input Tool to help you answer the following questions. You will not be scored on any changes you make to the graph. You can directly change the values in the boxes with the white background by clicking the boxes and typing. The graph and any related values will change accordingly. PRICE (Dollars per box) 24 21 18 15 12 6 3 0 0 600 QUANTITY (Thousands of boxes) 200 400 800 1000 1200 Based on the graph, the equilibrium price is Graph Input Tool MARKET FOR APPLES PRICE (Dollars per box) QUANTITY DEMANDED (Thousands of boxes) 4 1,600 per box, and the equilibrium quantity of apples is QUANTITY SUPPLIED (Thousands of boxes) ? 440 A member of the Legislative Assembly from Saskatoon, facing pressure from constituents alarmed at increases in the price of apple juice, introduces a bill to set a price ceiling of $9 per box of apples. If the market price arbitrarily starts at the price ceiling of $9 per box, the quantity of apples demanded will be boxes, while the quantity of apples supplied will be . Therefore, there will be a boxes of apples in this market. In the absence of any price controls, this would exert the market achieves equilibrium. of pressure on apple prices until
Transcribed Image Text:The following graph depicts the market for apples from British Columbia, which are sold in units of 9-kilogram boxes. The upward-sloping (orange) line represents supply, and the downward-sloping (blue) line represents demand. Use the Graph Input Tool to help you answer the following questions. You will not be scored on any changes you make to the graph. You can directly change the values in the boxes with the white background by clicking the boxes and typing. The graph and any related values will change accordingly. PRICE (Dollars per box) 24 21 18 15 12 6 3 0 0 600 QUANTITY (Thousands of boxes) 200 400 800 1000 1200 Based on the graph, the equilibrium price is Graph Input Tool MARKET FOR APPLES PRICE (Dollars per box) QUANTITY DEMANDED (Thousands of boxes) 4 1,600 per box, and the equilibrium quantity of apples is QUANTITY SUPPLIED (Thousands of boxes) ? 440 A member of the Legislative Assembly from Saskatoon, facing pressure from constituents alarmed at increases in the price of apple juice, introduces a bill to set a price ceiling of $9 per box of apples. If the market price arbitrarily starts at the price ceiling of $9 per box, the quantity of apples demanded will be boxes, while the quantity of apples supplied will be . Therefore, there will be a boxes of apples in this market. In the absence of any price controls, this would exert the market achieves equilibrium. of pressure on apple prices until
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 binding price ceiling.) Which of the following price ceilings (per box of apples) would be binding in the previously discussed market? Check all that apply. $7 $14 $9 Because it takes years before newly planted apple trees bear fruit, the supply curve in the short run is almost vertical. In the long run, farmers can decide whether to plant apples on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of apples is much more price sensitive than the short-run supply of apples. Assuming that the long-run demand for apples is the same as the short-run demand, you would expect the long-run effect of a binding price ceiling on quantity to be than the short-run effect.
Transcribed Image Text: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 binding price ceiling.) Which of the following price ceilings (per box of apples) would be binding in the previously discussed market? Check all that apply. $7 $14 $9 Because it takes years before newly planted apple trees bear fruit, the supply curve in the short run is almost vertical. In the long run, farmers can decide whether to plant apples on their land, to plant something else, or to sell their land altogether. Therefore, the long-run supply of apples is much more price sensitive than the short-run supply of apples. Assuming that the long-run demand for apples is the same as the short-run demand, you would expect the long-run effect of a binding price ceiling on quantity to be than the short-run effect.
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