When the law of one price is violated in that the same good is selling for two different prices,an opportunity for what type of transaction is created?
A)return-to-equilibrium transaction
B)risk-assuming transaction
C)speculative transaction
D)arbitrage transaction
E)none of the above

Question

Quizplus · Accepted Answer

When the law of one price is violated, meaning the same good sells for different prices in different markets, an arbitrage transaction opportunity is created. Arbitrage involves buying the good in the market where it is cheaper and selling it in the market where it is more expensive to profit from the price difference.

When the Law of One Price Is Violated in That