In 2009, the voters of Oakland, California, passed a measure to tax medical cannabis (marijuana), effectively legalizing it. In 2010, the City Council adopted regulations permitting industrial-scale marijuana farms with no size limits but requiring each to pay a $ 211,000 per year fee. 21 One proposal called for a 100,000 square feet farm, the size of two football fields. Prior to this legalization, only individuals could grow marijuana. These small farmers complained bitterly, arguing that the large firms would drive them out of the industry they helped to build due to economies of scale. Draw a figure to illustrate the situation. Under what conditions (such as relative costs, position of the demand curve, number of low-cost firms) will the smaller, higher-cost growers be driven out of business? (In 2012, the federal government brought an end to this business in Oakland. However, Colorado and Washington state passed laws permitting marijuana sales as of 2013.)
Answer to relevant QuestionsFor a firm, how does the concept of producer surplus differ from that of profit if it has no fixed costs? The North American Free Trade Agreement provides for two- way, long- haul trucking across the U. S.-Mexican border. U. S. truckers have objected, arguing that the Mexican trucks don’t have to meet the same environmental ...For the monopoly in figure at what quantity is its revenue maximized? Why is revenue maximized at a larger quantity than profit? Modify panel b of figure to show the revenue curve.Why is the ratio of the monopoly’s price to its marginal cost, p/MC, larger if the demand curve is less elastic at the optimum quantity? Can the demand curve be inelastic at that quantity? Show mathematically that a monopoly may raise the price to consumers by more than a specific tax imposed on it.
Post your question