Predict what
would happen to the equilibrium price of marijuana if it were legalized.
Use demand &...

Question

Predict what 
would happen to the equilibrium price of marijuana if it were legalized.
 Use demand & supply analysis to answer. Provide verbal and 
graphical explanation.This paper has to be three pages. Two pages for the problem and one page for work cited.Have to be in MLA style.

David · Accepted Answer

Let us fist consider the meaning of legalisation. The Amendment 64 which is set to be in force by early 2013 in Colorado, “makes the personal use, possession, and limited home growing of marijuana legal for adults 21 years of age and older. It establishes a system in which marijuana is regulated and taxed similarly to alcohol. The amendment will set up a system of marijuana distribution comprised of cultivators, product manufacturers (such as for marijuana-infused baked goods), and retail establishments. It also allows for the cultivation, processing, and sale of industrial hemp”. These rules will alter the demand and supply conditions in the market for marijuana.
The equilibrium price of marijuana (like any other good) depends on two factors and their interaction- demand and supply. We can consider each one separately to understand the possible effects on price due to the altered conditions in the market.

Predict what would happen to the equilibrium price of marijuana if it were legalized. Use demand & supply analysis to answer. Provide verbal and graphical explanation. This p aper has to be three...

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