If the government makes a good illegal and then imposes stiffer penalties on illegal drug buyers than on sellers, the price of the good ________ and the quantity ________.
A) falls; increases
B) rises; decreases
C) falls; decreases
D) does not change; decreases

Question

Quizplus · Accepted Answer

When penalties are stiffer for buyers, the demand decreases more significantly than the supply, leading to a decrease in both price and quantity.

If the Government Makes a Good Illegal and Then Imposes