Question

Topic: Marijuana

There is much discussion in the press about several states moving to legalizing marijuana, either for only medical purposes, or more extremely, for recreational purposes. Looking only at the economic impact (not moral implications) of such changes in the laws, discuss how the existing system of supply and demand for illegal marijuana will be changed with the new legalization. What will happen to existing supply avenues? Will legalization significantly change demand? How? Would one expect prices to change significantly? How? What would be the costs and benefits to governments, both in changes in enforcement requirements and in potential tax revenue?

list references and 100 words or more

Answer 1

Legalisation of Marijuana trade would definitely in short term, produce positive impacts on demand and supply. Since previously, it was being traded illegally, its cost of supplying was high relatively due to different arrangements to evade laws and regulations. On legalisation, supplier would see significant fall in cost and supply is likely to rise further. Better information and legalisation would enhance trust of people in Medicine. Therefore, they are likely to increase the demand for Marijuana.

Increase in supply and demand would impact price. If supply is greater than demand, there would be fall in price level. Now government would no longer be required to invest efforts in dedecting and punishing illegal activities. it would reduce cost to government. Rise in supply will increase more tax collection for government.