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 (shortage or surplus) ________ that is (smaller or larger)_________ in the long run than in the short run.

Answer 1

Shortage

Smaller

Step-by-step explanation:

A price ceiling limits how high the price of a good can rise.

Price ceiling discourages production but increases demand.

If there's a binding price ceiling on orange, in the long run, supply would fall, there would be a shortage and supply would be less in the long run when compared with the short run.

I hope my answer helps you