Question

A drug interdiction program that successfully reduces the supply of illegal drugs in the United States likely will

Answer 1

Answer:

The answer is: D) raise the price, reduce the quantity, increase total revenues, and increase crime.

Explanation:

According to the law of supply and demand, when the supply of any given product is artificially lowered, the supply curve will shift:

• this will cause the price of that product to increase  
• the profit margin of the suppliers will increase, increasing total revenue
• since illegal drugs would increase in crime, we can expect an increase in the crime rate on drug related crimes (e.g. addicts robbing).