Solved

A McDonald's Big Mac Value Meal Consists of a Big

Question 43

Multiple Choice

A McDonald's Big Mac value meal consists of a Big Mac Sandwich,Large Coke,and a Large Fry.Assume that there is a competitive market for McDonald's food items and that McDonald's sells the Big Mac value meal for $4.79.Does an arbitrage opportunity exist and,if so,how would you exploit it and how much would you make on one extra value meal?


A) Yes, buy an extra value meal and then sell the Big Mac, Coke, and Fries to make an arbitrage profit of $0.68
B) No, no arbitrage opportunity exists
C) Yes, buy a Big Mac, Coke, and Fries then sell the value meal to make an arbitrage profit of $1.09
D) Yes, buy a Big Mac, Coke, and Fries then sell the value meal to make an arbitrage profit of $0.68

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents