A. Why do some price controls help create black markets? b. What is a black market you have personally seen?

Price ceiling creates black markets

Price ceiling is when the government or an agency of the government sets the maximum price of a good or service. Price ceiling is binding if it is set below equilibrium price.

When a binding price floor is established, producers would earn less profits and as a result they would stop selling their products in the free markets. This would lead to scarcity and a result a black market can emerge. Goods would be sold at a higher price in the black markets than it would in the free markets.

So, black markets can arise as a result of price ceiling and the need of producers to earn higher profits

b. During the war, when there was a rationing of meat. Farmers declared less animal births to authorities and sold the undeclared livestock in the black market.

Also, in less developed countries e.g. Nigeria, when there is scarcity of fuel. Black markets arise where fuel are sold for higher prices

Explanation:

the investment was $14,174.196

explanation:

a lump sum means that the father of the example made one deposit and leave it be.

we need to know the value of a capital that generated at 4.05% per year during 28 years the sum of $48,613.24

now clearing the formula to solve for capital we got:

and we reach the answer investment = $14,174.20

a.