Black market
Definition. A black market is an illegal market in which goods or services are traded outside official rules, typically at prices above a binding price ceiling, or where the goods themselves are prohibited or rationed. It commonly emerges when a binding price ceiling causes a persistent shortage that some buyers are willing to pay more to overcome.
It is a common unintended consequence of price ceilings and bans, undermining the policy and shifting activity beyond regulation. Enforcement costs and quality or safety risks usually rise.
This term belongs to Price Controls: Ceilings and Floors in A Level Economics. Read the full chapter for the diagrams, worked examples and exam technique.
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