Note: This is an economics question.Based on the attached case:*What are the pros and cons of the creation of a medical marijuana monopoly?*What are the pros and cons of the legalization of medical marijuana by the Canadian government in terms of the price the users pay, the quantity of medical marijuana produced, and resource allocation efficiency during regulation and after its legalization? Mini-CaseThe Canadian Medical Marijuana MarketThe Canadian government created a medical marijuana monopoly by issuing only onelicense allowing a firm to operate. For 13 years, Prairie Plant Systems Inc. was the solesupplier of medical marijuana to Health Canada, which is the Canadian governmentagency that oversees the program.The government then eliminated the monopoly, creating a competitive market. Thelicensing law changed in 2014, when other firms could receive licenses and startproviding medical marijuana. By early 2015, Health Canada had received more than1,200 applications for licenses. While many applications were unsuccessful, significantentry occurred rapidly. The industry changed from being a monopoly to beingcompetitive within a year. By early 2018, more than 100 licensed producers of medicalmarijuana had entered the market. Additional producers of marijuana were poised toenter after the Canadian government passed legislation to legalize recreationalmarijuana in 2018.

Monopoly is the market where the producer enjoys the privilege of determining the price in the…

Answered: What are the pros and cons of the…

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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Note: This is an economics question.

Based on the attached case:

*What are the pros and cons of the creation of a medical marijuana monopoly?

*What are the pros and cons of the legalization of medical marijuana by the Canadian government in terms of the price the users pay, the quantity of medical marijuana produced, and resource allocation efficiency during regulation and after its legalization?

Mini-Case
The Canadian Medical Marijuana Market
The Canadian government created a medical marijuana monopoly by issuing only one
license allowing a firm to operate. For 13 years, Prairie Plant Systems Inc. was the sole
supplier of medical marijuana to Health Canada, which is the Canadian government
agency that oversees the program.
The government then eliminated the monopoly, creating a competitive market. The
licensing law changed in 2014, when other firms could receive licenses and start
providing medical marijuana. By early 2015, Health Canada had received more than
1,200 applications for licenses. While many applications were unsuccessful, significant
entry occurred rapidly. The industry changed from being a monopoly to being
competitive within a year. By early 2018, more than 100 licensed producers of medical
marijuana had entered the market. Additional producers of marijuana were poised to
enter after the Canadian government passed legislation to legalize recreational
marijuana in 2018.

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