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Explain each of the following statements using supply and- demand diagrams.a. When a cold snap hits Florida, the price of orange juice rises in supermarkets throughout the country.b. When the weather turns warm in New England every summer, the prices of hotel rooms in Caribbean resorts plummet.c. When a war breaks out in the Middle East, the price of gasoline rises, while the price of a used Cadillac falls.
a) Cold weather damages the orange crop, reducing the supply of oranges.This can seen be in the following graph as a shift to the left in thes upply curve for oranges.The new equilibrium price is higher than the oldequilibrium price. b) People often travel to the Caribbean from New England to escape cold weather, so the demand forCaribbean hotel rooms is high in winters.During summers, very few people travel toCaribbean as northern climate is more pleasant.The result shown in the following graph is a shift to the left of the deamnd curve.The…

ibrium price ofCaribbean hotel rooms is lower in summers than in winters. c)When a war breaks out in the Middle East, many markets are affected.Because a large proportion of oil production takes place there, the war disrupts oil supplies shifting the deamnd curve to the left as shown in the following graph.In results an increase in the equilibrium price of gasoline.



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