Question

In this market, the equilibrium price is _______  per box, and the equilibrium quantity of oranges is _______  million boxes.

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

True or False: A price ceiling below $25 per box is a binding price ceiling in this market. (Economists call a price ceiling that prevents the market from reaching equilibrium a binding price ceiling.) 

• True 

• False

Answer 1

In the market the equilibrium price will be 25 $ and equilibrium quantity will be 400 million tonnes.

Price ($)	quantity demanded	quantity supplied	pressure on price
35	240	800	price will decrease
15	560	0	price will increase

The price celing below 25 $ will prvepre the market to reach the equilibrium price. Hence the statement is TRUE.