The law of one price is not expected to hold for:
A) differentiated goods.
B) financial assets.
C) commodity goods.
D) oil.

Question

Quizplus · Accepted Answer

The law of one price assumes that identical goods will have the same price in different markets. However, differentiated goods have different characteristics that make them unique, so they are priced differently. For example, different brands of cars will have different prices because they have different features and qualities. Therefore, the law of one price is not expected to hold for differentiated goods.

The Law of One Price Is Not Expected to Hold