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Under which of the following conditions would the interdiction of illegal drugs result in a decrease in the quantity of drugs sold and in a decrease in total spending on illegal drugs by drug users?A. The price elasticity of demand for illegal drugs is 0.65.
B. The interdiction has the effect of shifting the demand curve for illegal drugs to the right.
C. The price elasticity of demand for illegal drugs is 1.25.
D. As a result of the interdiction, the price of illegal drugs increases by 10 percent and the quantity of illegal drugs sold decreases by 15 percent.
E. Both C and D.

Respuesta :

Answer:

E. Both C and D.

Explanation:

The elasticity of demand measures the responsiveness of quantity demanded to changes in price.

Demand is inelastic when a change in price has no effect or little effect on quantity demanded. The coefficient of elasticity for is usually less than 1.

Demand is elastic when a change in price has a greater effect on the quantity demanded. The coefficient of elasticity is usually greater than one.

In option c and d, the elasticity of demand is 1.25 and 1.5 respectively, Theodore the demand is elastic and an increase in price , reduces the quantity demanded.

This result in a decrease in the quantity of drugs sold and in a decrease in total spending on illegal drugs by drug users

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