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 is seized is .10 and the fine if a shipper is caught is $45 per ounce, then the equilibrium price of marijuana per ounce is
A) $50.
B) $9.50.
C) $10.56.
D) $4.50.
E) $5.50.
Correct Answer:
Verified
Correct Answer:
Verified
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