Econ 202 Black Markets

What is a black market?
The illegal business of buying or selling goods or currency in violation of restrictions such as price controls or rationing.
All black markets are a reaction to government policy such as….
Taxes, price controls, and quality controls
Outright prohibition of a good or service is
an extreme case of Price and/or Quantity Controls
Is black market activity legal or illegal?
all black market activity is illegal
Why do black markets exist?
The existence of black markets indicate that eliminating the market for a product is difficult if not impossible
What are some effects of the black market?
Tax revenues are reduced, criminals get rich, and products may not be safe.