Lisette owns a shoe store on the border of France. Due to price discrimination, she can buy Louboutin leather boots in Italy at a lower cost than purchasing them from her local French supplier, so once a month she drives to Italy and buys boots to resell at her store. What is this an example of?
A) speculation
B) arbitrage
C) dumping
D) predatory pricing
E) modeling

Question

Quizplus · Accepted Answer

This is an example of arbitrage, where Lisette takes advantage of the price difference between two markets (Italy and France) to buy low in one market and sell high in another.

Lisette Owns a Shoe Store on the Border of France