Black Market Price and The Control for Economical Development

1. What is black Market Price? 

2. How it is created? 

3. How we can control this?

To know the answer of all the question you should read carefully the following article.

In the absence of any control of PM would be equilibrium price and OM would be equilibrium quantity.

Then, if govt. fixed a lower price at P"M" the quantity demand OM" will execute that quantity offered OM', In another word demand has increased by MM" as the quantity supply has decreased by MM'. Normally the price P'M', owen to decreased to supply but since the govt. has control the price. It can't be allowed to rise, then P'M' will become the black market price. In order to satisfy all purchases rationing will have to introduce since it is impossible to control the retails, Black Markets are bound  emerge, P'M' will become the market price. This is because they reduce the scramble/Mixup among the purchase to reduce the supply OM'. If the whole quantity OM' is sold in the black market it would be saced/get P'M'.

 

The Graph of Black Market 

How We can Control Black Market for Economical Development.

Actually, only a part will be supplied at the black market price and a part will be supplied on the control price. If their is an effective control on the producers but no control on the black market, then the consumer will suffer because the high black market price. The producer suffers because they recite the price control which is lower than the free market price, Here only the black marketer will gain.



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