The law of one price should hold well for
A)differentiated products.
B)any individual goods traded internationally.
C)homogeneous goods.
D)All of the above.

Question

Quizplus · Accepted Answer

The law of one price states that in a competitive market, identical goods should have the same price in different locations. This implies that the law of one price should hold well for homogeneous goods, where there is no differentiation in quality or features between items. Therefore, the correct choice is C) homogeneous goods. The law of one price may not hold for differentiated products or goods traded internationally due to factors such as transportation costs, tariffs, and market power of firms.

The Law of One Price Should Hold Well for