Question

– are illegal markets that emerge in response to price controls. A few buyers are able to obtain the good at the open-market price; the rest must resort to illegal means. The additional demand is met by – suppliers selling at much – prices.

Answer 1

Answer:

TRUE

Explanation:

Because the price is below equilibrium the quantity will fall and shortage will ocour. Because of that the price in the black market will become even higher than it was before the price control, making the price control counter productive.

So this additional demand is met at much higher prices than legal market.

Answer 2

Answer:

The correct answers are Black Markets, Underground and Higher.

Explanation:

Black markets are illegal markets that emerge in response to price controls. A few buyers are able to obtain the good at the open-market price; the rest must resort to illegal means. The additional demand is met by underground suppliers selling at much higher prices.

Government of a country does not support or encourage such activities. People usually buy such products at market rate when the product is low in demand and sell it in black at higher prices when the demand of the product is high.