Question

consider the market for illegal drugs

a) is the demand for illegal drugs elastic or inelastic? explain

b) using graphs, please illustrate which method is more effective in reducing the total market size for illegal drugs : drug education or drug interdiection(to forbid; prohibit)?

Answer 1

(a) Very few drug addiets bereak their lesbruetree haleit because of a rise in drugs price. Thus the demand for illegal drugs are inelastie Even estalelished Adeliets may turn to robbery, stealing or some other violent crimes to support their habit.

b) Policymakers aim to reduce the use of drugs ley two methods. The first one is drug enterolifetion and the other one is drug education. The effect of a drug interellipetion is directly on the sellers. As the government arrests some Smugglers from entering the country, it raises the cost of selling drugs and leads to a fall in leftward shift in supply.

Prill Oz Quantity of drugs Ag 1

But as the demand is inelastic, the rise in price is proportionately higher than the fall in quantity, so the revenue collected by the sellers rise cehen. drug interdiction is put into place.

Diagramatically, as the supply shrinks froms, tos, the quantity falls from a to a and price ènereases to P. from P <fig-1). A It results in a higher revenue han ir ( Area P, E2 0,0 is greater than the area P, г. 9,0). Молекул, боеоgе thе uѕе in price the addiets who already have

to steal to support their habit would need more quiek eash to cling to their haleit. This gives rise to drug related Crime.

Because of these adverse effects of drug interdiction, the government often prefers drug education. Brug edveation affeels the demand sale of the market. By aborting the consumers about the destruction and ruins that drugs can loring the government stiffens the will of Consumers through drug eduction

Pliagramatically, ( Fig-2), Suecessful brug education redevies both the price and the quantity in the market. Also as a result of this the revenue faills from Ęgt zo to PEx do. Thus, in contrast to drug interdiction, drug education reduce leath drug use and drug related erime

Quantity of drugs
the last diagram is figure-2