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If drug enforcement is directed at the consumer, explain why demand elasticities are the main criteria....

If drug enforcement is directed at the consumer, explain why demand elasticities are the main criteria.

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Answer #1

Answer - The elasticity of demand for drugs is the main criteria which governs the effect of the drug enforcement. The drug enforecement can be imposed in certain forms such as the rise in the taxes , rise in price by limiting supply etc.

If the demand for drug is inelastic , the enforecement is likely to be less effective because the demand will not change or change very less as a result of any rise in price done to discourage the consumption.

On the other hand , the elastic demand for the drugs will make the drug enforcement successful. The agencies can raise the price or the tax leading to rise in price . The demand being elastic will fall and the goal of enforcement will be fulfilled. Hence elasticity is the main factor determining the effect of enforcement.

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