Given the market for illegal drugs,when the government is successful in reducing the flow of drugs into the United States,
A) supply decreases,demand is unaffected,and price increases.
B) demand decreases,supply is unaffected,and price decreases.
C) demand and supply both decrease,leaving price essentially unchanged.
D) supply decreases,demand increases,and price increases substantially as a result.

Question

Quizplus · Accepted Answer

When the government successfully reduces the flow of illegal drugs into the United States, the supply of drugs decreases. However, demand for drugs is typically unaffected by government actions, meaning that the demand curve remains the same. As a result, a decrease in supply with no change in demand leads to an increase in price. Therefore, choice A is the correct answer.

Given the Market for Illegal Drugs,when the Government Is Successful