A black market is a market that either deals in illegal products or services, or deals in legal products and services in an illegal way (for example, by flaunting restrictions or regulations). There are many types of black markets, for many types of products.
- Black markets exist for illegal drugs, unregulated transport providers (like unregistered taxis), prostitution, weapons, cigarettes, currency in some cases, human organs, and other products and services. An exhaustive list is impossible.
- Black market prices can be higher than regular prices, like in drug markets or other markets where risks to suppliers exist. Prices can also be lower than market prices if the supplier avoids production costs or taxes, such as the black market for stolen goods.
- Black markets often prosper when an economic good is illegal but not seen by society as harmful, such as the black market for alcohol during prohibition and the market for marijuana today. The revenues of black market activity are sometimes used for other illegal activities. By legalizing these products, revenues to criminal organizations tend to decrease.
- Not all black markets are for weapons and drugs. Black markets can exist for less sinister items. For example, a black market has developed in response to public smoking bans in restaurants and bars. In California, Ohio, and Utah, restaurants and bars called "smokeasies" ignore non-smoking regulations and profit with increased sales.
- Countries with a high degree of economic freedom generally have fewer, smaller black markets, whereas countries with excess corruption, regulation, or monopoly activity experience more, larger black markets. In this sense, economic freedoms prevent the black market economy from undermining the established economy.
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