Trade barriers explain why the law of one price might not hold.

Question

Quizplus · Accepted Answer

Trade barriers, such as tariffs and quotas, increase the cost of importing goods and make it more difficult for foreign competitors to enter a market. This can result in price differences for the same product in different countries, as the additional costs incurred by importers are passed on to consumers. Therefore, the law of one price, which assumes identical prices for identical products, may not hold due to trade barriers.

Trade Barriers Explain Why the Law of One Price Might