Suppose a storm destroys 30 percent of the orange crop in the United States,which results in lower supply.
(A)Draw a supply and demand diagram to show what will happen to the equilibrium price and quantity of oranges in the United States.Assume the demand curve does not shift.
(B)Suppose the U.S.government observes that the price of oranges is increasing rapidly and imposes a price ceiling equal to the original equilibrium price.What effect does the price ceiling have on the quantity supplied and demanded of oranges?
(C)How is consumer surplus and producer surplus affected by the price ceiling?

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The Answer of Suppose a storm destroys 30 percent of the orange crop in the United States,which results in lower supply.
(A)Draw a supply and demand diagram to show what will happen to the equilibrium price and quantity of oranges in the United States.Assume the demand curve does not shift.
(B)Suppose the U.S.government observes that the price of oranges is increasing rapidly and imposes a price ceiling equal to the original equilibrium price.What effect does the price ceiling have on the quantity supplied and demanded of oranges?
(C)How is consumer surplus and producer surplus affected by the price ceiling?

Suppose a Storm Destroys 30 Percent of the Orange Crop