please help me i know but i dont know how to explain little help please :P
2007-11-04 17:42:24 · 3 answers · asked by judith e 1 in Social Science ➔ Economics
Rationing will cause the creation of a black market for goods with inelastic price curves. IE, Hanna Montanna tickets or whatever the hot concert is. There is a limited supply so an underground market for selling these at a profit will emerge. This also happens in communist countries with food
2007-11-04 18:22:41 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Rationing is the same as too little supply. Because of the law of supply and demand, when you limit the supply of a product in high demand (rationing), there will be a compensatory dramatic increase in price. A high price (and associated high profits) will encourage some people to risk breaking the law by providing the product illegally (a black market)
2007-11-05 01:53:11 · answer #2 · answered by Doctor J 7 · 0⤊ 0⤋
When people can't get what they need or want legally, they will often resort to illegal means, thus black market. So when something is rationed not everybody is going to get the amount that they need or want legally so people resort to other means.
2007-11-05 01:53:27 · answer #3 · answered by Diane D. 3 · 0⤊ 0⤋