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The perfectly competitive market structure predicts that in the long run, there will be normal profits, assuming that the market for the illegal drugs is not subjected to externalities such as intervention by the government.
In the short run, the U.S government war on drugs would lead the drug dealers to making lower profits. In a normal situation in a perfectly competitive market structure, where the government does not intervene, sellers may make super profits. However, this is not the case when the government intervenes since it affects the normal activities in the market. In the long run, drug dealers will make lower profits because government intervention affects their operatoins. Without government intervention, they make normal profits.
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