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Unformatted text preview: P 2 1 Quantity of Drugs Q 2 1 Price of Drugs Demand S 2 1 2 1 (a) Drug Interdiction Quantity of Drugs Price of Drugs Supply D 2 1 (b) Drug Education 3. . . . and reduces the quantity sold. 2. . . . which raises the price . . . 2. . . . which reduces the price . . . 1 2 1. Drug interdiction reduces the supply of drugs . . . 1. Drug education reduces the demand for drugs . . . 3. . . . and reduces the quantity sold. Figure 5-10 P OLICIES TO R EDUCE THE U SE OF I LLEGAL D RUGS . Drug interdiction reduces the supply of drugs from S 1 to S 2 , as in panel (a). If the demand for drugs is inelastic, then the total amount paid by drug users rises, even as the amount of drug use falls. By contrast, drug education reduces the demand for drugs from D 1 to D 2 , as in panel (b). Because both price and quantity fall, the amount paid by drug users falls....
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.
- Spring '10