In 2004, Congress allocated over $20 billion to fight illegal drugs. About 60 percent of the funds was directed at reducing the supply of drugs through domestic law enforcement and interdiction. Some critics of this approach argue that supply-side approaches to reduce the drug supply actually help producers.
Demonstrate graphically (you may draw by hand on paste in the discussion board as an image) the effect of supply-side measures on the market for illegal drugs.
Explain how these measures affect drug producers. (Hint: Consider the elasticity of demand)
Demonstrate the effects of demand-side measures (you may draw by hand on paste in the discussion board as an image) such as treatment and prevention on the market for illegal drugs.
How does the shift in demand affect the profitability of producers?