Glendale Community College Wk 3 Supply and Demand for Illegal Drugs Discussion


Discussion Questions:
In 2004, Congress allocated over $20 billion to fight illegal drugs. About 60 percent of the funds was directed at reducing the supply of drugs through domestic law enforcement and interdiction. Some critics of this approach argue that supply-side approaches to reduce the drug supply actually helped drug producers.
Demonstrate graphically the effect of supply-side measures on the market for illegal drugs.
Explain how these measures affect drug producers. (Hint: Consider the elasticity of demand).
Demonstrate the effect of demand-side measures such as treatment and prevention on the market for illegal drugs.

How does the shift in demand affect the profitability of producers?

In 2004, the University of California education system drastically cut enrollment due to significant state budget cuts and asked 7,600 applicants to defer enrollment for two years after completing two years at a community college. Tuition costs remained fixed by the state. 

Demonstrate the situation described with supply and demand curves, carefully labeling any excess supply or demand for college admission.
What is the market solution to the excess demand for college?
What is a possible reason the market solution was not pursued?


budget cuts

Tuition Costs

market solution

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