Under which of the following conditions would the interdiction of illegal drugs result in a decrease in the quantity of drugs sold and in a decrease in total spending on illegal drugs by drug users?
A)The interdiction has the effect of shifting the demand curve for illegal drugs to the right.
B)The price elasticity of demand for illegal drugs is 1.3.
C)The price elasticity of supply for illegal drugs is 0.8.
D)As a result of the interdiction,the price of illegal drugs increases by 20 percent and the quantity of illegal drugs sold decreases by 16 percent.

Question

Quizplus · Accepted Answer

If the price elasticity of demand is greater than 1 (elastic), a price increase will lead to a proportionally larger decrease in quantity demanded, resulting in a decrease in total spending.

Under Which of the Following Conditions Would the Interdiction of Illegal