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Orange Production

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Submitted By teekayb15
Words 709
Pages 3
Orange Production
ECO/561
December 16, 2013
George Sharghi

Abstract
In this paper, it will discuss the production of oranges in the United States. It will also examine the relationship of the demand for oranges to the price. In addition, it will discuss the supply of oranges and factors that have an effect on the supply of oranges in the U.S. Additionally; it will explain what factors would bring about a surplus and a shortage in supplies.

Orange Production
Oranges are a very popular fruit all over the world. The United Stated is the 2nd largest producer of oranges. “The market is relatively free and competitive, since the government does not intervene in the production and processing of oranges” (Baur & Orazem,). The demand for U.S oranges is expected to increase as the top producing country Brazil is expected to produce less and less oranges in the future. “Brazil’s production is expected to continue to fall in 2013/14 as many producers have uprooted their orange trees in favor of planting other more profitable crops. Brazilian supply is expected to become increasingly restricted, causing higher demand for US supply both within the US and also from the international market. Demand for US produce is likely to continue to rise, potentially resulting in a surge in exports while at the same time leading to an increase in the prices we pay.”("Could the US Citrus Industry Reap the Benefits of Falling International Production", 2013). Based on this information and according to the laws of demand the price of oranges should increase since the demand on oranges is increasing. When consumers are willing to pay this increase in price it results in a profit to the US producers. If the price increases to price consumers are not willing to pay then consumers will look to see if a competitor has a cheaper price or look for a substitute.
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