Suppose the United States steps up efforts to combat drug trafficking and, with the aid of the Colombian military, destroys a significant percentage of cocaine crops.Predict the impact of increased drug interdiction on the market for cocaine in Los Angeles.

Question

Quizplus · Accepted Answer

If a significant percentage of the cocaine crops are destroyed, the supply of cocaine will decrease. This will cause an increase in the price of cocaine in Los Angeles as buyers compete for the reduced supply. The demand for cocaine may remain the same or decrease as a result of the increased drug interdiction efforts, but this would not directly impact the market price if the supply has decreased.

Suppose the United States Steps Up Efforts to Combat Drug