Given the market for illegal drugs,if the government should attempt to reduce the flow of drugs into Canada,what would happen
A)Supply would fall and prices would rise.
B)Demand would fall and prices would fall also.
C)Demand and supply would both fall, leaving prices basically the same.
D)Supply might fall, but demand would increase, causing prices to skyrocket.

Question

Quizplus · Accepted Answer

If the government attempts to reduce the flow of drugs, it would decrease the supply available in the market. As a result, the limited supply would lead to higher prices because the demand for drugs would still exist, and now there is less supply available to meet that demand. Therefore, supply would fall and prices would rise.

Given the Market for Illegal Drugs,if the Government Should Attempt