Suppose that legalizing the use of heroin would decrease its price by 95 percent.  If the price elasticity of demand for heroin is ​-2.50​, what would be the percentage increase in the quantity of heroin demanded from legalizing heroin​?  
  
enter your response here percent.

To calculate the percentage increase in the quantity of heroin demanded, we can use the price elasticity of demand formula:

\[
\text{Price Elasticity of Demand (PED)} = \frac{\% \text{ change in quantity demanded}}{\% \text{ change in price}}
\]

Given:
- PED = -2.50
- Percentage change in price = -95% (since the price decreases by 95%)

Now, solving for the percentage change in quantity demanded:

\[
-2.50 = \frac{\% \text{ change in quantity demanded}}{-95\%}
\]

\[
\% \text{ change in quantity demanded} = -2.50 \times (-95\%)
\]

\[
\% \text{ change in quantity demanded} = 237.5\%
\]

So, the percentage increase in the quantity of heroin demanded would be **237.5%**.

Do you need further explanation or have any questions?

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Here are 5 related questions to expand on this topic:
1. What factors might affect the price elasticity of demand for a drug like heroin?
2. How does a highly elastic demand influence government policy decisions about drugs?
3. What are other potential social effects of reducing the price of illegal drugs?
4. How does the price elasticity of demand for other substances like alcohol or tobacco compare to heroin?
5. What are the implications of elasticity for drug rehabilitation programs?

**Tip:** Inelastic goods, like essential medicines, typically see smaller changes in demand when prices change.

Suppose that legalizing the use of heroin would decrease its price by 95 percent. If the price elasticity of demand for heroin is ​-2.50​, what would be the percentage increase in the quantity of heroin demanded from legalizing heroin​?

Learn how to calculate the percentage increase in the quantity of heroin demanded when its price decreases by 95%, given the price elasticity of demand is -2.50. This step-by-step solution covers essential economic concepts such as price elasticity of demand and percentage change, making it suitable for college-level students studying economics.

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