Black markets are markets where items are sold in violation of government rules and regulations.
a. Suppose that the government imposes a $1 per loaf price ceiling on bread, well below its free-market price. Explain how the existence of a black market for bread could potentially improve society's well-being.
b. Suppose that the government establishes a $20 per bushel price floor in the market for corn. Explain how the existence of a black market for corn could potentially improve society's well-being.