After a severe hurricane in South Carolina, the price of electric generators quadrupled. People living outside of South Carolina purchased electric generators in their home states and drove them to South Carolina to sell at a much higher price. What is this an example of?
A) arbitrage
B) perfect price discrimination
C) price gouging
D) marginal-price geography

Question

Quizplus · Accepted Answer

Arbitrage involves buying a product in one market at a lower price and selling it in another market at a higher price, as seen with the generators being bought outside South Carolina and sold there for more.

After a Severe Hurricane in South Carolina, the Price of Electric