Buying at a low price in one market and reselling at a higher price in another market will
A)not generate any profit because of transportation costs.
B)not generate any profit because of transactions costs.
C)eventually eliminate all of the price differences.
D)eventually eliminate most, but not necessarily all, of the price differences.

Question

Quizplus · Accepted Answer

While there may be some transportation costs and transaction costs associated with buying and selling in different markets, these can often be offset by the price differences between the markets. However, as more traders buy low in one market and sell high in another, the price differences will tend to decrease, which is why most, but not necessarily all, of the differences will eventually be eliminated.

Buying at a Low Price in One Market and Reselling