The law of one price states that identical products should sell for the same price everywhere as long as transactions costs are zero.

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The law of one price states that identical products should sell for the same price everywhere, assuming that there are no transaction costs. This implies that in a perfectly competitive market with free trade and no barriers to entry, there should be no price differences for the same product between different markets. However, in reality, transactions costs and other barriers to entry may prevent identical products from being sold at the same price everywhere, so the law of one price is not always observed.

The Law of One Price States That Identical Products Should