The demand curve shifts to the right by the same amount as the supply curve shifts to theright. In this case, the price of marijuana will not change (Try to visualize the demand and supply curvesshifting) where diedPhilippinacAPPLICATION 12: WHAT WILL HAPPEN TO THE PRICE OF MARIJUANA IF THE PURCHASEAND SALE OF MARIJUANA ARE LEGALIZED?In the United States, the purchase or sale of marijuana is unlawful. However, there is still ademand for and supply of marijuana. There is also an equilibrium price of marijuana. Let's say thatprice is P1patonlangSuppose that beginning tomorrow, the purchase and sale of marijuana become legal. Will P1rise, fall, or remain the same?marijuana. If the purchase and sale of marijuana are legal, then some people currently producing comand wheat will likely choose instead to produce and sell marijuana. So the supply of marijuana will rise.If nothing else changes, the price of marijuana will fall.The answer, of course, depends on what we think will happen to the demand for and supply ofnumber of people who want to buy and consume marijuana will likely rise. In other words, there will bemore buyers of marijuana. This will increase the demand for marijuana.But something else is likely to change. If marijuana consumption is no longer illegal, then thedemand and supply curves to the right. What happens to the price of marijuana depends on how muchthe curves shift. Three possibilities exist:Thus, decriminalizing the purchase and sale of marijuana is likely to shift both the marijuanaright. In this case, the price of marijuana will not change. (Try to visualize the demand and supply curvesshifting.)1. The demand curve shifts to the right by the same amount as the supply curve shifts to theIn this

The demand curve shifts to the right by the same amount as the supply curve shifts to the right. In this case, the price of marijuana will not change (Try to visualize the demand and supply curves shifting)

The demand curve shifts to the right by the same amount as the supply curve shifts to the right. In this case, the price of marijuana will not change (Try to visualize the demand and supply curves shifting)

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 25P

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