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Drug addiction is a problem, suppose the government has some fixed budget for drug enforcement, please...

Drug addiction is a problem, suppose the government has some fixed budget for drug enforcement, please use the example to explain what is the market failure being addressed? (Hint: externalities, paternalism, etc)

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Answer #1

The market failure type addressed here is "negative externality" as drug addiction has caused severe ramifications and worst implications like death, loss of life, increasing crime rates, depression, unemployment, etc and has thus brought more harm to society. Thus government addresses the situation using drug enforcement rules and regulations to curb the usage and eliminate negative externality.

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