A product sells for $750 in Canada.The exchange rate is $1 to 9.55 pesos.If the law of one price holds,what is the price of the product in Mexico?

Question

Quizplus · Accepted Answer

The law of one price states that in the absence of transportation costs and barriers to trade, the price of a product should be the same in all markets when expressed in a common currency. To find the price in Mexico, multiply the price in Canada by the exchange rate: $750 * 9.55 = 7,162.50 pesos.

A Product Sells for $750 in Canada