Pricing




Goods and services acquired illegally and/or transacted for in an illegal manner may exchange above or below the price of legal market transactions:

  • They may be cheaper than legal market prices. The supplier does not have to pay for production costs and/or taxes. This is usually the case in the underground economy. Criminals steal goods and sell them below the legal market price, but there is no receipt, guarantee, and so forth. When someone is hired to perform work and the client is unable to write off the expense (particularly common for work such as home renovations or cosmetological services), the client may be inclined to request a lower price (usually paid in cash) in exchange for foregoing a receipt, which enables the service provider to avoid reporting the income on his or her tax return.
  • They may be more expensive than legal market prices. For example, the product is difficult to acquire or produce, dangerous to handle, is strictly rationed, or not easily available legally if at all. If exchange of goods are made illegal by some sort of state sanction, such as is often seen with certain pharmaceutical drugs, their prices will tend to rise as a result of that sanction.

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