Final answer:
A black market is a type of market where entrepreneurs and merchants sell goods illegally, often created when restrictions are imposed on certain goods. An example of black market activity includes 'bootlegging' during the Prohibition era. Such markets are illegal and often risky.
Step-by-step explanation:
A black market is a place where entrepreneurs and merchants sell goods illegally. This kind of market typically arises when there are restrictions on the production, distribution or consumption of the goods by the government, making their sale illegal. In an attempt to earn higher profits, some firms defy the law and engage in these illegal activities.
For instance, during the Prohibition era in the United States, illegal sale and transport of alcoholic beverages, or 'bootlegging', became widespread. Similarly, in today's world, some markets thriving on the illegal sale of exotic luxury goods and vital raw materials could also be considered black markets.
While these markets offer an opportunity for businesses to stay afloat, they are seen in a negative light due to their illegality and the risk involved in their operations.
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