Concept:A parallel market is an unofficial market where goods or currencies are traded outside government-controlled prices.
Explanation:Parallel markets are usually caused by government price legislation.
When the government fixes a maximum price below the equilibrium price, it creates excess demand, or a shortage.
Sellers then divert goods to unofficial markets to sell at higher prices.
Similarly, fixing a minimum price above the equilibrium creates excess supply.
This surplus also encourages trading in parallel markets at lower prices.
Excess supply alone is only a symptom, not the root cause.
Therefore, the main reason for parallel markets is government interference through price legislation.
Answer:C. price legislation