The issur of onaah applies when one charges more than an additional sixth of the market price.

Does one have to take into account competition with black market prices (where goods in this case are much cheaper) when pricing a product?

  • The question is unclear. Are we talking about goods only on the black market, like drugs? Or are we talking about things like cigarettes which can be much cheaper on the black market? – ShamanSTK Oct 14 '16 at 21:26
  • No, take a good that has a price fixed by the government. now you can illegally buy that good for a cheaper price. When someone sells the good legally (at the higher price) is he violating onaah due to black market activity. – EconJohn Oct 14 '16 at 21:41
  • Why did you delete your question about yeshivot? – mevaqesh Oct 16 '16 at 0:48
  • @mevaqesh, felt it was irrelevant for the site. – EconJohn Oct 16 '16 at 1:37
  • @EconJohn If the question was: what is the objective of yeshivot or talmud Torah, then that seems totally on topic. – mevaqesh Oct 16 '16 at 1:40

No. One does not take black market prices into account if they are buying/selling in a normal store. Were they buying in a black market they obviously would. It all goes by what's normal for your type of situation. A ballpark can charge $5 for a soda if that's normal ballpark prices. Your local supermarket cannot.

For more information see http://dinonline.org/2016/05/20/onaah-beware-of-price-fraud/

Determining Market Value

One of the principal challenges related to Onaah is determining the market value. There are two ways in which market value is determined. The simple case is if there is a published, set market price for the item. The more complicated and more common case is where there is a range of prices.

The Beis Yosef (Choshen Mishpat 209, 2) rules that goods that are sold individually, without any specific price guidelines, are not governed by the laws of Onaah. If there is no set price for items such as raw wool and milk (see Bava Metzia 68b), these are outside the boundaries of the Onaah prohibition.

Following the same principle, the Aruch Hashulchan (227:7) writes that goods usually sold at different prices by different stores are exempt from the laws of Onaah. Where some charge more and some less, there is no prohibition against being among those that charge more. According to this, for most goods today (except those subject to government or other price regulation mechanisms) Onaah is somewhat rare.

The Machaneh Efraim (Mechero 24), however, cites the case of seforim as proof that Onaah applies even to items that have no single price. This is also the opinion of the Bach and Shach (Choshen Mishpat 209:1), who maintain that the lack of a fixed price does not necessarily preclude the laws of Onaah. Shut Shevet Haleivi (5:218) rules stringently on this matter, and prohibits Onaah even when there is no absolute price.

Based on this reasoning, Erech Shai (209) prohibits selling at a higher price even when there is a degree of fluctuation between different shops. Presumably, however, there must be some average price on the market with which to index Onaah. If there is a recommended price given by the manufacturer it may serve as a yardstick on which Onaah calculations can be based. Where this is not available, Pischei Choshen (p. 296) suggests that the median price is followed for Onaah purposes.

Another view is that market price is determined by what the majority of vendors sell the item for (Imrei Yosher Vol. 2, no. 155; see also Heshiv Moshe 102).

Where it is accepted practice for different stores to sell the same goods at different prices (a luxury story may sell the same goods for a higher price, reflecting the high-end nature of the store), the price which is used to determine onaah is based on the prices which are charged by this type of store (Pischei Choshen ibid).

And see http://5tjt.com/sky-high-prices-and-halacha/

HOW IS MARKET VALUE DETERMINED? There are two situations in which market value is determined: (1)If there is a set market price for the item and (2) if there is a range of prices. If there is a set market price for the item in that neighborhood, some Poskim hold that there is a problem of Onaah even if it is less than 16.67% (see Aruch HaShulchan 227:7 and Machane Efraim Onaah Siman 7). There is a debate in regard to where there is a range of prices in the community. The Beis Yoseph (CM 209) suggests that Onaah does not exist in such a situation. Most Poskim (see Bach and Shach cited in Shaivet HaLevi Vol. V #218) hold that even if there is a range of prices there is still a prohibition of Onaah. Some Poskim write that the figure is calculated by determining 16.67% above the highest price for the item within the range. Others write that one calculates 16.67% above the median price of the item. Rabbi Yaakov Yeshayahu Blau z”l in his Pischei Choshain (Vol. IV p. 296) seems to feel that this is the most authoritative view. There is another view that the determination of the market price is based upon what the majority of vendors sell the item for (Imrei Yosher Vol. II #155). This may also be the view of the Haishiv Moshe (Responsa #102). [It is possible that the Haishiv Moshe may be in agreement with Rav Blau, however, as the language is not clear.] Therefore in the prices discussed above, it would seem that if General Kosher Supermarket charges $20 per pound and Acme Kosher Supermarket $22 per pound and Yiddel’s Kosher Supermarket charges $21 dollars a pound, then the fourth supermarket about to determine its pricing, cannot charge more than $24.50 per pound. The truth is that the fourth supermarket should not be charging above $21, but it is not considered an amount that should be returned until the price reaches $24.50 per pound. THE RANGE VIEW There is another understanding of these halachos as propounded by Rav Chaim Kohn in his book “Hilchos Mishpat” (page 294). His view, confirmed by this author in conversation with Rav Kohn, is that the true market price is what is determined by supply and demand in what the market will tolerate. Therefore, according to Rav Kohn, even if there is a minority of people that will purchase the item without looking at the price, this is still considered to be a valid market price. When this author suggested to Rav Kohn that this opinion may almost negate the concept of Onaah he responded as follows: “In your example, where three stores price an item at $20 per pound and a fourth store prices it at $30 per pound, there are still buyers. Yet there would be no buyers at $50 per pound. The $50 would be considered Onah.” Rav Kohn’s view was not accepted by the author of the Pischei Choshen z”l, and it seems was also not accepted by Rabbonim in the area that I had spoken with.

See also http://www.jlaw.com/Articles/price_wage_levels.html

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