According to what economists call the "law of one price,"

Question

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The "law of one price" states that if transaction costs (such as transportation costs) are low, then the price of identical products in different markets will eventually become equal. Therefore, option D is the best choice. Option A is incorrect because the world price is not determined solely by the country with the highest relative demand, but rather is influenced by factors such as production costs and global supply and demand. Option B is incorrect because the opportunity cost of producing a good may be influenced by global demand, and not just domestic demand. Option C is incorrect because the cost of labor is just one factor that can influence the price of a product, and not necessarily a determinant of the price itself. Option E is incorrect because there can still be differences in demand patterns even if the price of the product is equal in different markets.

According to What Economists Call the "Law of One Price