You are watching TV late one night and see an ad from ValuCo for the Dice-o-matic food slicer. You learn that the Dice-o-matic sells for $29.95. But wait, there's more! ValuCo is also including in this deal a set of Ginsu steak knives worth $10.95 and another free gift worth $7.95. Assuming that there is a competitive market for ValuCo items, at what price must ValuCo be selling this three-item Dice-o-matic deal to ensure the absence of an arbitrage opportunity and uphold the Law of One Price?

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The Answer of You are watching TV late one night and see an ad from ValuCo for the Dice-o-matic food slicer. You learn that the Dice-o-matic sells for $29.95. But wait, there's more! ValuCo is also including in this deal a set of Ginsu steak knives worth $10.95 and another free gift worth $7.95. Assuming that there is a competitive market for ValuCo items, at what price must ValuCo be selling this three-item Dice-o-matic deal to ensure the absence of an arbitrage opportunity and uphold the Law of One Price?

You Are Watching TV Late One Night and See an Ad