Final answer:
The price of orange juice rises due to a cold snap in Florida because the supply of oranges is reduced, causing a leftward shift in the supply curve on a supply-and-demand diagram, resulting in a higher equilibrium price.
Step-by-step explanation:
To explain why the price of orange juice rises after a cold snap hits Florida using supply-and-demand diagrams, we consider that Florida is a major producer of oranges. A cold snap can damage the orange crop, reducing the supply of oranges available to be processed into orange juice.
This change is represented on a supply-and-demand diagram as a leftward shift in the supply curve. This shift indicates that less orange juice is available at each price level, and because the demand for orange juice remains relatively stable, the equilibrium price must rise to reach the new point where supply equals demand. Other factors can also influence supply such as the cost of inputs, productivity, and government regulations.
Market models are used by economists to predict how such events will impact possible changes in price. On the graph, the new equilibrium is at a higher price point and a lower quantity, illustrating why the price of orange juice increases in supermarkets nationwide after a cold snap in Florida.