Subject is on illegal drugs

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Subject is on Illegal Drugs

The author is correct in stating that the legalization of drugs is a widely debated issue among economists and others. Since the time these articles were written, Washington and Colorado have legalized recreational use of marijuana. To put the argument in a better light consider it in the context of elasticity. The supply elasticity of drugs is high (elastic). The primary motivation for selling drugs illegally is pecuniary. As price falls so does the incentive for selling. The demand elasticity on the other hand is low (inelastic). Despite high prices, users will continue to purchase.

Consider moving only the supply curve to the left. What is the relative effect on price versus quantity? Now consider moving only the demand curve to the left by the same amount. What is the relative effect? When demand is inelastic, reducing supply has little effect on quantity and a large effect on price. Consequently, some economists argue that the "war on drugs" (i.e. supply interdiction) is a misguided policy, which has no effect on sales and also increases crime because of the price increase.

Reference no: EM132373461

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