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In the marijuana industry, what will be the production and price of marijuana in the monopoly?...

In the marijuana industry, what will be the production and price of marijuana in the monopoly? Draw graph and explain why?

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Answer #1

Under a monopoly market condition, a firm producing marijuana will produce at the quantity where the Marginal cost of the firm meets the Marginal revenue. This is the quantity at which the firm can maximize its profit. HE will decide the quantity first and the price will be decided accordingly. IN the graph below the firm is maximizing the profit by producing quantity Q and price P. The green area represents the profit is the firm, The price the firm has set will be above the marginal cost.

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