Suppose exceptionally good weather provides a much bigger than expected orange harvest.Instructions: Depict how this event will affect the market for oranges by dragging the appropriate curve in the graph.Price (S/orange)ŽIMarket for orangesQuantity (oranges/week)$What will happen to the equilibrium price and quantity of oranges?↑Equilibrium price will decrease and equilibrium quantity will increase.Equilibrium price will increase and equilibrium quantity will decrease.Both equilibrium price and equilibrium quantity will decrease.Both equilibrium price and equilibrium quantity will increase.

The Supply curve depicts the positive relationship between price and quantity supplied, keeping…

Suppose exceptionally good weather provides a much bigger than expected orange harvest. Instructions: Depict how this event will affect the market for oranges by dragging the appropriate curve in the graph. rice ($/orange) Å Market for oranges

Suppose exceptionally good weather provides a much bigger than expected orange harvest. Instructions: Depict how this event will affect the market for oranges by dragging the appropriate curve in the graph. rice ($/orange) Å Market for oranges

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter5: Markets In Motion And Price Controls

Section: Chapter Questions

Problem 10P

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Concept explainers

Market Surplus and Shortage Analysis

In everyday language, a “surplus” indicates that there is an excess of something, while a “shortage” means that there is a scarcity of it. In economics, “market surplus” refers to the condition where the quantity of a certain good more available than what is required or “demanded” by the market. In the same way, a “market shortage” refers to the condition where the quantity of a certain good is less available than what is “demanded” by the market. If quantity in demand is written as Qd and quantity that is supplied is written as Qs, then, the condition Qs > Qd indicates market surplus and condition Qd > Qs indicates market shortage.

Question

Suppose exceptionally good weather provides a much bigger than expected orange harvest.
Instructions: Depict how this event will affect the market for oranges by dragging the appropriate curve in the graph.
Price (S/orange)
Ž
I
Market for oranges
Quantity (oranges/week)
$
What will happen to the equilibrium price and quantity of oranges?
↑
Equilibrium price will decrease and equilibrium quantity will increase.
Equilibrium price will increase and equilibrium quantity will decrease.
Both equilibrium price and equilibrium quantity will decrease.
Both equilibrium price and equilibrium quantity will increase.

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