If a firm is unable to keep its national markets separate,individuals or businesses may undercut its attempt at price discrimination by engaging in
A)speculation.
B)arbitrage.
C)dumping.
D)predatory pricing.
E)forecasting.

Question

Quizplus · Accepted Answer

Arbitrage refers to the practice of buying a product in a market where the price is low and selling it in a market where the price is high. If a firm is unable to keep its national markets separate, individuals or businesses may engage in arbitrage by buying a product in a market where it is cheap and selling it in a market where it is expensive, thus undercutting the firm's attempt at price discrimination.

If a Firm Is Unable to Keep Its National Markets