One would expect more arbitrage to occur between two markets if:
A) the products are differentiated in terms of their fundamental characteristics.
B) the products have built-in tracking mechanisms that enable the discovery of the distributors.
C) the demand curves in the two markets are essentially the same.
D) products are non-differentiated and the different markets have good transportation networks between them.

Question

Quizplus · Accepted Answer

Non-differentiated products and good transportation network between markets allow for easier movement of goods, reducing the costs of arbitrage. This would lead to more arbitrage between the two markets.

One Would Expect More Arbitrage to Occur Between Two Markets