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Complete price transparency in a perfect information marketplace is necessary for ____________ to take effect.
- ABertrand's Law
- Bthe Law of Universal Prices
- Cthe Law of One Price
- Dthe Law of Perfect Commerce
Correct answer: C
Discussion 1
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CCommunity
the Law of One Price
Complete price transparency in a perfect information marketplace is necessary for the Law of One Price to take effect. The law of one price states that in the absence of trade frictions, and under conditions of free competition and price flexibility, identical goods sold in different locations must sell for the same price when prices are expressed in a common currency.
Complete price transparency in a perfect information marketplace is necessary for the Law of One Price to take effect. The law of one price states that in the absence of trade frictions, and under conditions of free competition and price flexibility, identical goods sold in different locations must sell for the same price when prices are expressed in a common currency.