Solved

If Markets for Addictive Drugs Have a More Elastic Demand

Question 2

Multiple Choice

If markets for addictive drugs have a more elastic demand curve than is often thought, and if addicts tend to be unstable people with low incomes, we might speculate that the most likely reason for the surprising elasticity estimates is that


A) the substitution effect is smaller than expected because addicts aren't as addicted as we thought.
B) the income effect has a more constraining effect than we had anticipated.
C) addictive drugs are inferior goods.
D) the income and substitution effects work in opposite directions.

Correct Answer:

verifed

Verified

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents