2-[War on Drugs-25points]War on Drugs refers the federal campaign of prohibition of drugs, military aid, and military intervention, with the stated aim being to reduce the illegal drug trade.

a.What is the impact of War on Drugs on the equilibrium of market for illegal drugs? (5P) Explain and a use a supply and demand diagram to illustrate your answer. Your answers should be based on your graphical analyses. Your explanations should complement what you draw on your graphs.

b.What is the effect of War on Drugs on drug producers (cartels) total cost and total revenue? Explain and a use a supply and demand diagram to illustrate your answer. Your answers should be based graphical analyses. Your explanations should complement what you draw on your graphs.(10P)

c.Based on your answers to parts (a) and (b), do you think war on drugs is an effective policy in combating drug use and the cartels? Suggest a policy (or a combination of polices) that could be relatively more effective in a) controlling the consumption of illegal drugs and b)limiting the power of drugs cartels. (10P)

Use supply and demand diagrams to show the impact of your suggested policies on the market (the size of the market and the cartels' total revenue).Your answers should be based graphical analyses. Your explanations should complement what you draw on your graphs.