The law of one price is a statement of comparative advantage in terms of currencies.

Question

Quizplus · Accepted Answer

The law of one price states that in the absence of transaction costs and barriers to trade, identical goods sold in different locations must sell for the same price when prices are expressed in a common currency. It is not a statement of comparative advantage, which refers to the ability of a party to produce a particular good or service at a lower opportunity cost than another.

The Law of One Price Is a Statement of Comparative