Asked by
Jemoi Gibbs
on Oct 14, 2024
Verified
In the absence of government interference, there is a constant marginal cost of $5 per ounce for growing marijuana and delivering it to buyers.If the probability that any shipment of marijuana is seized is .10 and the fine if a shipper is caught is $25 per ounce, then the equilibrium price of marijuana per ounce is
A) $8.33.
B) $7.50.
C) $30.
D) $4.50.
E) $5.50.
Equilibrium Price
The cost at which the amount of a product that buyers want to purchase matches the amount that sellers are willing to supply, creating equilibrium in the market.
Marginal Cost
Marginal cost is the increase in total cost that arises from producing one additional unit of a product or service.
- Analyze and expound on the effects of levies, monetary incentives, and official interference on market steadiness and price determinants.
- Gain insight into the moral and economic effects of unlawful markets and the policy interventions deployed by the government to regulate them.
Verified Answer
ES
Learning Objectives
- Analyze and expound on the effects of levies, monetary incentives, and official interference on market steadiness and price determinants.
- Gain insight into the moral and economic effects of unlawful markets and the policy interventions deployed by the government to regulate them.