Question

law of one price

law of one price

Homework Answers

Answer #1

Answer : Law of One Price is the concept of economics which states that the prices of the similar or same or identical commodity have the same price across world , irrespective of the fact of location , when certain factors are considered.Presence of Arbitrage opprotunities is responsible for the existence of law of one price market.In Law of One price , it has been assumed that thesre is no transportation cost , no legal restrictions , no exchange rate fluctuations , no influence of buyer and seller.Therfore we can say that Law of Price is concept which assumes such fictious market and states that the prices of the similar or same or identical commodity have the same price across world irrespective of the fact of location.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Example of law of one price.
Example of law of one price.
Discuss the meaning of the Law of One Price
Discuss the meaning of the Law of One Price
What is the Law of One Price all about? Does this law always exist in the...
What is the Law of One Price all about? Does this law always exist in the market? Can you provide an example?
Economists are fond of teaching students about the “Law of One Price” which suggests that the...
Economists are fond of teaching students about the “Law of One Price” which suggests that the price of otherwise identical products should be the same in different areas. But, does the law of one price always hold? Clearly not when it comes to regional cost of living. It seems to cost a different amount to buy housing, schooling, etc. in different areas of the United States. Does this imply that we can safely assume that the law of one price...
Which of the following concepts is based on the law of one price? Select one: a....
Which of the following concepts is based on the law of one price? Select one: a. Relative Purchasing Power Parity b. Absolute Purchasing Power Parity c. Covered interest Parity d. Triangular Arbitrage
According to the law of one price, if the exchange rate between the Euro and the...
According to the law of one price, if the exchange rate between the Euro and the US dollar is €1 = US$ 1.20, a costume that retails for €250 in Paris should sell for _____ in Chicago.
What is the law of one price, and how does it relate to purchasing power parity...
What is the law of one price, and how does it relate to purchasing power parity theory?
Explain what is meant by ‘the law of one price’ and critically evaluate its perceived role...
Explain what is meant by ‘the law of one price’ and critically evaluate its perceived role in determining exchange rates
Explain in a few sentences what would happen according to the Law of One Price to...
Explain in a few sentences what would happen according to the Law of One Price to the supply and demand if identical assets were priced differently in two different regions.
Discuss your understanding of risk-return and capital structure to the Law of One Price. Provide examples.
Discuss your understanding of risk-return and capital structure to the Law of One Price. Provide examples.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT