Question

The theory of “rational addiction” states that past, present, and future consumptions of an addictive good such as cocaine are compliments to each other. Describe the idea behind this theory and what it then predicts regarding whether the demand for such a good is more elastic in the short run or the long run. Do the results of the research studies presented in class confirm these predictions? Explain.

Answer 1

Note : Hear I have explained about the the theory of rational addiction with past current and future behaviour and also elastic nature of addictive goods in the long run. But the question mentions about "the results of research studies presented in the class". Since there is no information about such research studies presented in your class, it is not discussed.