Question

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 that is in the long run than in the short run.

Answer 1

You would expect that a binding price ceiling would result in a bigger shortage of oranges in the long run than in the short run

Step-by-step explanation:

Let's use the attached plot to understand the problem.

In the short run supply is fixed, as stated in the problem almost vertical. For simplicity let's draw it vertically. In the long run is price sensitive so it has the traditional upward slope. Demand is the same in the short and long run.

At the price ceiling always the quantity demand would be more than the quantity supplied as shown in the plot.

The difference between the demand and supply at the ceiling price will give the "shortage"

In the short run since producers cannot adjust production they will be a shortage at the given price. But in the long run when producers can adjust they will be willing to produce even less at the ceiling price. Then the quantity produce would be even lower in the long run. Thus there would be more shortage in the long run