You see on Kijiji that a used XBOX One sells for $100 and a new XBOX One sells for $300.Is this an arbitrage opportunity?
A)No.,because the market for a used XBOX One is not the same as the market for a new XBOX One.
B)No,because the market for a used XBOX One is a competitive market.
C)Yes,because the market for a used XBOX One is a competitive market.
D)Yes,because the market for a used XBOX One is not the same as the market for a new XBOX One.
E)No,because Kijiji is not a competitive market.

Question

Quizplus · Accepted Answer

The market for a used XBOX One is not the same as the market for a new XBOX One, so there is no opportunity for arbitrage. Additionally, the fact that the market for a used XBOX One is competitive does not necessarily make it an arbitrage opportunity. Finally, the competitiveness of the market on Kijiji is irrelevant to whether or not an arbitrage opportunity exists.

You See on Kijiji That a Used XBOX One Sells