Some policy makers have claimed that the U.S. government should purchase illegal drugs, such as cocaine, to

Question:

Some policy makers have claimed that the U.S. government should purchase illegal drugs, such as cocaine, to increase the price that drug users will face and therefore reduce their consumption. Does this idea have any merit? Illustrate this logic in a simple supply and demand framework. How does the elasticity of demand for illegal drugs relate to the efficacy of this policy? Are you more or less willing to favor this policy if you are told demand is inelastic?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Microeconomics

ISBN: 978-1464187025

2nd edition

Authors: Austan Goolsbee, Steven Levitt, Chad Syverson

Question Posted: