A black market
A) can arise when government imposes a price ceiling below the market clearing price.
B) can arise when government imposes a price floor below the market clearing price.
C) was created when after hours trading was permitted on some stock exchanges.
D) is a market where products with outdated expiration dates are sold.

Question

Quizplus · Accepted Answer

A black market can arise when government imposes a price ceiling below the market clearing price. This means that the government sets a legal maximum price for a good or service, but if the equilibrium price in the market is higher than the price ceiling, buyers are willing to pay more than what is legally allowed, and sellers are willing to supply the good or service at a higher price. This creates a black market where buyers and sellers can transact at prices above the legal limit.

A Black Market