Illegal markets - The Black/Shadow Market


When demand and price for a product remains high, consumers may try to buy the good in the black market. This is the market where illegal transactions that are not recorded by the government take place, so no taxes are paid on them.


If the prices for designer handbags are too high, some consumers may choose to buy counterfeit versions of them for much cheaper.


Other examples include: using a dodgy boxes for cheap TV and sports, or buying illegal fireworks at Halloween.


Impact of Taking Part in the Black Market


 Buying counterfeit goods is illegal.  It is bad for businesses that operate legally and they may lose out on sales, as illegal goods or services sold in the black market are usually cheaper. For example, if more households in Ireland use illegal dodgy boxes to watch sport, legitimate businesses like Clubber who stream GAA matches would lose out on revenue.


 A consumer may pay less for the goods or services, but they lose their consumer rights when shopping in the black market. There is also no regulation so goods/services may not be as safe as in legal markets.


Feature Taxes Selling Price


Consumer Safety


Consumer Rights


Shopping in a Legal Market Shopping in the Black Market


Taxes are paid to the government to help fund schools/roads/health No taxes paid to the government


Usually higher as legitimate businesses have to charge taxes


Guaranteed by laws/regulations to help ensure safety


You can get a refund/exchange for a faulty good or a service not carried out correctly


Usually lower as counterfeit goods may be cheaper to make if they are of lower quality


No guarantees for the consumer that the good or service is safe to use


No legal way to get your money back if you have a problem


321


STRAND 3 CHAPTER 29: Demand, supply & market equilibrium


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