Final answer:
The interdiction of illegal drugs would reduce the quantity sold and spending on drugs if the demand is elastic, as indicated by Option E, which includes both a price elasticity of demand greater than 1 (Option C) and an example where a price increase leads to a larger percentage decrease in quantity sold (Option D).
Step-by-step explanation:
The interdiction of illegal drugs would result in a decrease in the quantity of drugs sold and a decrease in total spending on illegal drugs by drug users if the demand for these drugs is elastic. Option A, which states that the price elasticity of demand for illegal drugs is 0.65, suggests that demand is inelastic, and hence, even if price increases, the total spending might not decrease as expected. On the other hand, Option B, which suggests a rightward shift in the demand curve, would typically result in an increase in quantity demanded and potentially an increase in spending.
Option C, with an elasticity of 1.25, suggests that demand is elastic; a price increase could lead to a proportionately larger decrease in quantity demanded. Option D's specified scenario, where a 10% price increase results in a 15% decrease in quantity sold, indicates elastic demand and would result in a drop in both quantity sold and total spending. Thus, Option E, which includes both C and D, correctly identifies the conditions under which drug interdiction would reduce both the quantity sold and the spending on illegal drugs.