The black market is not a physical place, but rather an economic activity in which merchandise and/or services are bought and sold illegally. Also called the “underground market,” this market gets its name from the activity it conducts out of sight and often outside the sight of law enforcement. The black market or buying and selling of products and services take place often in plain sight. A black economy is a highly organized and a vast market where the regular taxation rules and norms of trade are not adhered to. The variety of goods traded in the black market is enormous and the most commonly traded black market items are weapons, drugs and alcohol at the least.
Many factors can make a transaction illegal, thus qualifying it as a black market transaction. The good or service itself may be illegal, such as human trafficking, alcohol, illicit drugs, weapons, or prostitution. One prime example of an illegal market created because of an illegal product was the result of prohibition. After alcohol was outlawed in the U.S. in 1919, it was smuggled into the country and sold at speakeasies and private bars. The result was an era of organized crime and an estimated 500 million US dollars (USD) in lost tax revenues annually. When the demand is strong and gains from trade can be had, markets will develop and exchanges will occur in spite of the restrictions (pg.77). The price of certain goods sold in a black market could be lower than the legal market price. This is usually because the goods may be stolen.
Today’s Black marketers or bootleggers do not pay any taxes and can offer a price advantage to customers. Goods such as pirated DVDs/Music and fashion accessories that are sold at a lower price in the black market, and are often copies of the original. On the other hand, the price of certain products sold in the black market can be higher than the normal prices concert ticket and football games, This is the case when there are shortages in...
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