If a firm in a competitive market structure produced marijuana, allocative, technical, and distributive efficiency would ensue. Being that the firm knows the demand for marijuana, they would produce at a rate that is what the consumer wants. Due to marijuana’s similarity to cigarettes, technical efficiency would be insured because large corporations such as Philip Morris would have to change very little of their production process to distribute marijuana joints all over America along with their other brands of cigarettes. B

revenue relatively easy. This increased revenue will guarantee that the market for hemp will stay efficient.

To prevent the allocative inefficiency if produce by an oligopoly, the good should be ran by a mixed government/pure competitive market structure. The market for marijuana should be highly regulated by the government. Strict laws on production and sale of the good should be enforced. Government laws limiting the production by large corporations would allow smaller startup firms or dealers to enter or exit the industry easily. The existence of many small firms will force the larger producers to keep the price of the good equal to the point where supply and demand are equal. Thus, the production of marijuana would be allocative efficient. The government’s main role would be that of limiting the large firm’s ability to act as an oligopoly, which may eventually lead to a monopoly such as Microsoft. Other then the limiting of large firms, the government should not regulate the production of marijuana so much as the consumption of the substance. Pure competition is the only way to insure that the production and distribution of marijuana stays allocative efficient. If not produced allocatively efficient, high prices and lack of quantity will result. In order to run efficiently, the government must not over-regulate the hemp production. Over-regulation will make marijuana to difficult to obtain and therefore create and inefficient market. Light regulation of smaller companies will lead to the expansion

Some topics in this essay:
Philip Morris, Legalization Marijuana, AmSouth Amphitheatre, competitive market, market structure, legalizing marijuana, allocative efficient, legalizing marijuana benefit, competitive market structure, market failure, quantity result, marijuana allocative, predatory pricing, allocative efficiency, allow firms,