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14 May, 07:40

If an identical product can be sold in two different markets, and no restrictions exist on the sale or transportation of product between markets, the product's price should be the same in both markets. This is known as: A. equilibrium. B. interest rate parity. C. the law of one price. D. relative purchasing power parity.

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  1. 14 May, 07:48
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    If an identical product can be sold in two different markets, and no restrictions exist on the sale or transportation of product between markets, the product's price should be the same in both markets. This is known as: law of one price.

    Explanation:

    The Law of one price has effects in the trade on the price of similar products when they are in exchange in more markets. When there exists only one price for the products and commodities without the considerations of the place they are traded will be said to be an effective market.

    Law of one price will be applicable to those similar products that are when sold in two or more different markets having the same price in all the markets they are sold. This law will be applicable to most of the products and commodities.
  2. 14 May, 07:53
    0
    The correct answer is letter "C": the law of one price.

    Explanation:

    The law of one price states that the price of assets should be the same around the world in case there are no barriers in international trade. For this scenario to be possible, transportation costs and currency exchange rates must be the same and there should not be manipulation from producers or consumers in the market. Besides, the key to achieving a unitary price for determined assets would rely on arbitrage opportunities among the markets.
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Home » Business » If an identical product can be sold in two different markets, and no restrictions exist on the sale or transportation of product between markets, the product's price should be the same in both markets. This is known as: A. equilibrium. B.
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