Price of cancer medication Supply $160 100 50 Demand Quantity of 100 cancer medication

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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A “black market” is a place where people make illegal trades in goods and services. For instance, during the Soviet era, it was common for American tourists to take a few extra pairs of Levi’s jeans when visiting the Soviet Union: They would sell the extra pairs at high prices on the illegal black market.

Consider the following claim: “Price-controlled markets tend to create black markets.” Let’s illustrate with the following figure. If there is a price ceiling in the market for cancer medication of $50 per pill, what is the widest price range within which you can definitely find both a buyer and a seller who would be willing to il­legally exchange a pill for money? (There is only one correct answer.)

Price of
cancer
medication
Supply
$160
100
50
Demand
Quantity of
100
cancer
medication
Transcribed Image Text:Price of cancer medication Supply $160 100 50 Demand Quantity of 100 cancer medication
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