In the Absence of Government Interference, There Is a Constant

question 16

Multiple Choice

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 seized is .20 and the fine if a shipper caught is $45 per ounce, then the equilibrium price of marijuana per ounce is

• A)$50.
• B)$17.50.
• C)$4.
• D)$14.
• E)$6.