Order the answer to: Demand may be price-elastic for…
|Question||Demand may be price-elastic for casual users of drugs-ones who are not addicted or for whom substitute products are readily available. In this case, restrictions or price increases will have a significant impact on use. Draw a supply and demand diagram like Figure 5-4 where the demand curve is price-elastic. Show the effect of a steep tax on quantity demanded. Show that, because demand is price-elastic, total spending on drugs with restrictions will fall. Explain why this analysis would support the argument of those who would severely limit the availability of addictive substances.|
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