In the Absence of Government Interference, There Is a Constant

question 4

Multiple Choice

In the absence of government interference, there is a constant marginal cost of $6 per ounce for growing marijuana and delivering it to buyers.Suppose that government authorities seize shipments whenever they find them and resell the marijuana that they seize on the open market.The probability that any shipment of marijuana is seized is .50.If a shipment is seized, there is no other punishment besides loss of the marijuana that is seized.The effect of the government action is to

• A)leave prices unchanged.
• B)raise the equilibrium price by $6.
• C)lower the equilibrium price by $3.
• D)raise the equilibrium price by $12.
• E)raise the equilibrium price by $3.

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Definitions:

Strategic Opportunism

Focuses on long‐term objectives while being flexible in dealing with short‐term problems.

Long-Term Objectives

Goals or plans that are intended to be achieved over an extended period, typically over several years, focusing on future growth and development.

Short-Term Problems

Issues or challenges that need immediate attention and resolution, typically affecting an organization or individual over a brief period.

Crisis Management

The identification, prevention, and handling of emergencies, especially those that threaten to harm an organization's people, profitability, or reputation.