can anyone explain to me the price elasticity of demand and supply of illegal substances? please and thank you.
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Supply I suspect is very inelastic. Most individual producers are probably cranking out as much as they can, traffickers move as much as they can, dealers sell what they can. A 10% move up or down in price wouldn't - I'd guess - change supply very much. Big price changes would result in more resources getting drawn into the distribution and supply of the drug.
Demand, I'm not sure about. It -might- be more elastic. If a fair number of users consume based on what they can afford, then the amount they purchase will be somewhat elastic. My initial impulse was to say demand was inelastic, but the more I think about it, the more I think a lot of buyers have something closer to a fixed budget.
The main factor in drug economics though is that supply is radically constricted both by the barriers to entry (aka the DEA) and the fact that various supply side parties shoot each other to try to restrict supply and drive up price without cutting their own sales back.1