If a store sells a good at the market price, even though the government authorities have set the maximum price that can be charged for it, the store is selling the good in a(n)

Complete Question:

If a store sells a good at the market price, even though the government authorities have set the minimum price that can be charged, the store is selling the good in an?

Group of answer choices

A. black market for a market price that is higher.

B. black market for a market price that is lower.

C. effort to eliminate a surplus of the good.

D. legal market for a market price that is higher.

E. legal market for a market price that is lower.

A. black market for a market price that is higher.

Explanation:

If a store sells a good at the market price, even though the government authorities have set the maximum price that can be charged for it, the store is selling the good in a black market for a market price that is higher.

A black market can be defined as a type of underground market that is typically characterized by illegal transactions of goods and services as against the ethical trade of finished products.

In this context, any trader selling goods at a market price other than the maximum price that the government has set is certainly selling at a higher price and would only do that in an illegal way such as a black market, so as not to be caught by the regulatory agencies of the government.

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the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.