Question

1. Suppose in the country of Weedland, the market demand for grams of marijuana is given by Qd = 100 - 3P, and the market supply for marijuana is given by Qs = -50 + 2P, where P is the price of a gram of marijuana. a. What is this legal marijuana market worth to consumers? Why?! b. What is this legal marijuana market worth producers? Why? c. What is this legal marijuana market worth to society? Why? increased, and imposed costs upon society equal to $42. If you with the power to "shut down" the legal market for me why not? Be sure to appeal to the relevant economic principle ncidence of psychosis" among legal marijuana users 2. Refer back to#1. Suppose the incidence of "psychosis" among legalm costs upon society equal to $42. If you were a regulatory policy czar un" the legal market for marijuana, would you do so? Why or relevant economic principle to justify your answer. 3. Redo #1 and #2 for the case where Qp = 100.

Answer 1

Due to presence of HOMEWORKLIB POLICY, I am answering one question.

1.

a. In equilibrium, we have:

Qd = Qs

100 - 3P = -50 + 2P

5P = 150

P = 30

Q = 10

Worth to consumers:

Consumer Surplus:

$0.5(\frac{100}{3}-30)(10)=16.66$

Reason: Consumer surplus is the net surplus benefit received by consumers from the market (willingness - price).

b.

Worth to producers:

Producer Surplus:

$0.5(30)(10)=150$

Reason: Producer surplus is the net profit received by producers from the market (price - cost).

c.

Worth to society:

Total surplus = consumer surplus + producer surplus = 16.66 + 150 = 166.66

Reason: Total surplus is the net benefit received by individuals present in society (both consumers and producers).

If you are satisfied with the answer, please provide a positive rating. Feel free to comment in case of queries.

Have a nice day ahead!