________ simply states that, in the long run, individual goods must sell for the same price in all countries.

Question

Quizplus · Accepted Answer

The law of one price simply states that, in the long run, individual goods must sell for the same price in all countries. This is because of the arbitrage opportunities available. If a good is cheaper in one country, traders will buy it there and sell it in the country where it is expensive, driving the prices up in the first country and down in the second, until the prices equalize across borders.

________ Simply States That, in the Long Run, Individual Goods