The law of one price states that if the costs of transportation are ________, the price of the same good in different countries should be ________.

Question

Quizplus · Accepted Answer

The law of one price states that, in the absence of transportation or trade costs and barriers, the price of a particular homogeneous good should be the same in different markets. Therefore, if the costs of transportation are small, the price of the same good in different countries should be roughly the same.

The Law of One Price States That If the Costs