Originally posted by sigma:
Quote:

The only way we can put a dent in these drugs is to de-criminalize them. The price of drugs will go down and drug dealers profits will also, causing drug dealers to stop selling drugs. Locking every drug dealer up isn't going to solve the problem.



This explanation has never made much sense to me and is contrary to the basic laws of economics.

Demand for narcotics is highly inelastic. People who want drugs will buy them. ... But what incentive do the dealers have to lower prices? People are buying at the price they're charging now, and there's no reason to believe it would significantly change demand if they lowered their prices. They can keep their prices the same they are today, sell just as much, and make an even greater profit margin.





Assuming perfectly inelastic demand, as you state, ANY increase in supply will drop the price... that is the basic law of economics. A shift to the right (more Q supplied at every price) will bring the equilibrium price down along the demand curve.

People were buying cds at $18 a pop at your local Sam Goody until Wal-Mart came in and started selling them for 12. Where's the incentive there? Lower prices bring more volume!

Not saying that this is a good or bad answer for solving the problem of drug proliferation and abuse, just pointing out the flaws in the economics!

Cheerio!

Diesel owns you