Juzzy Orange Juice is a product of The California Orange Growers' Association.Demand and supply of the product are both highly sensitive to changes in the weather.During hot months demand for orange juice grows rapidly.However, hot weather has an adverse effect on supply because it reduces the size of the orange crop.

Demand and supply functions for Juzzy Orange Juice are as follows:

Where:P is average price ofJuzzy orange juice in dollars.P_W is average price of canned soda in dollars.Y is the average income level in dollars.R is the average daily high temperature in degrees.P_L is the average hourly wage rate for unskilled workers in dollars.

a.When quantity is expressed as a function of price, what are the Juzzy Orange Juice demand curve and supply curve if P_W = $4, Y = $7,500,R = 20 degrees, P_L = $8. [ hint: find the inverse demand curve and supply curve]

b.Calculate the surplus or shortage of Juzzy orange juice when P_J = $1.75, $2, and$3 ( 9points)

Price

Quantity Demanded

Quantity Supplied

Surplus or Shortage

$1.75

$2

$3