Refer to the accompanying figure.At what price would there be the least pressure to form a black market?
A)$5
B)$8
C)$13
D)$15
E)$20

Question

Refer to the accompanying figure.At what price would there be the least pressure to form a black market? 
A)$5 
B)$8 
C)$13 
D)$15 
E)$20

Quizplus · Accepted Answer

At a price of $8, the quantity demanded and quantity supplied are equal, meaning there is no excess demand or excess supply. Therefore, there would be no pressure to form a black market as the market would be in equilibrium. Prices below $8 would result in excess demand and potential shortages, creating an incentive for a black market to form. Prices above $8 would result in excess supply and potential surpluses, also potentially creating an environment for a black market to thrive.

Refer to the Accompanying Figure