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Defining Black Markets and Gray Markets

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Describe the gray market and how it is distinguished from the black market. Identify the pros and cons of sourcing from the gray market. How would sourcing from the gray market be a competitive advantage? Give an example.

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Solution Summary

This solution describes the factors involved in black markets and gray markets and compares the two.

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A black market in one where most goods and services that are bought and sold are illegal. The black market is a very organized way for certain organizations to conduct business without having to follow proper business protocols. Also, in the black market there is no price control and transactions can be made without paying any taxes making the revenue more ludicrous for the offender even when the prices are lower or higher than the regular market. However, punishment for black market infarction can be quite severe. Other names for the black market are: shadow economy, underground market, underdog and parallel economy, black economy. The most common goods that are sold on a ...

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Carmel Philistin, MBA/HCM
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  • BA, Brooklyn College
  • MBA/HCM, Phoenix University
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