What Is the Incentive to Create a Black Market When

question 10

Multiple Choice

What is the incentive to create a black market when a binding price floor exists?

• A) A black market emerges because buyers are frustrated with shortages of the product.
• B) A black market emerges because sellers have an incentive to charge a higher price on the illegal market.
• C) A black market emerges because sellers want a market where they can sell higher-quality products.
• D) A black market does not emerge; the price will eventually fall to the equilibrium price.
• E) A black market emerges because sellers need a way to dispose of surplus product.

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Definitions:

Oxidized

The process or result of a substance losing electrons or increasing its oxidation state, often associated with a gain of oxygen or loss of hydrogen.

Hydrogen Peroxide

A chemical compound with the formula H2O2, known for its oxidizing properties and use as a disinfectant and bleaching agent.

Luminal

A compound used in forensic science to detect blood traces, as it produces blue luminescence with the hemoglobin in blood.

Reaction Rate

The speed at which a chemical reaction occurs, measured by the change in the concentration of a reactant or product over time.