What is the likely effect of the government reducing the supply of illegal drugs?
A)The total amount spent on drugs will decrease.
B)The total amount spent on drugs will increase.
C)The quantity of drugs consumed will remain unchanged.
D)The demand for drugs will fall.
E)The demand for drugs will increase.

Question

Quizplus · Accepted Answer

When the government reduces the supply of illegal drugs, it typically leads to an increase in the price of these drugs due to the reduced availability. As a result, even though the quantity consumed might decrease, the total amount spent on drugs can increase because of the higher prices. Demand for drugs is often relatively inelastic, meaning consumers' desire for drugs does not decrease significantly with an increase in price, especially in the short term.

What Is the Likely Effect of the Government Reducing the Supply