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Substitute and Complementary Goods with Legalization of Marijuana

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Snack food venders and beer distributors earn some monopoly profits in their local markets but see them slowly erode from various new substitutes. When California voted on legalizing marijuana, which side would you think that California beer distributors were on? What about snack food venders? Why?

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This answer explores substitute and complementary goods in a market where legalized marijuana is introduced. Specifically, the markets in questions are those for beer products and those for snack foods.

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Snack food vendors and beer distributors earn some monopoly profits in their local markets but see them slowly erode from various new substitutes. When California voted on legalizing marijuana, which side would you think that California beer distributors were on? What about snack food vendors? Why?

Monopoly profits can be realized when a firm's product is very unique so that they become the sole provider or control a huge portion of the market—say 80%+. If substitutes are available in the ...

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