What is likely to be the impact of the US government's war on drugs

Economics
Tutor: None Selected Time limit: 1 Day

Illegal Drugs

Assume that the market for illegal drugs is an example of a perfectly competitive market structure. Describe what the perfectly competitive market model predicts for illegal drugs in the long run.

What is likely to be the impact of the U.S. government s war on drugs in the short run? In the long run?

Use economics to discuss this issue and explain these ideas.

Oct 19th, 2015

Thank you for the opportunity to help you with your question!

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.


Please let me know if you need any clarification. I'm always happy to answer your questions. I would be pleased being your private tutor. Thank you
Oct 19th, 2015

Pleasure working with you

Oct 19th, 2015

Are you studying on the go? Check out our FREE app and post questions on the fly!
Download on the
App Store
...
Oct 19th, 2015
...
Oct 19th, 2015
Dec 9th, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer