When the Government Passes a Law Making a Particular Good

question 134

Essay

When the government passes a law making a particular good illegal, does it matter for the black market price and quantity if the penalties for breaking the law are imposed on the buyers or on the sellers?

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Definitions:

Ownership

The legal right or status of having control over property, resources, or assets.

Wheat

A cereal grain that is a staple food used to make flour for bread, pasta, pastry, and other food products.

Employees

Individuals who are hired by a business or organization to perform specific duties in exchange for compensation such as wages, salary, or other benefits.

Agents

Representatives authorized to act on behalf of another person or entity, often in business or legal matters.