An Arbitrage Is Trading In

question 30

Multiple Choice

An arbitrage is trading in:

• A)options and futures at the same time.
• B)two different markets when the price of the same item is different.
• C)two different markets when the price of two different items is the same.
• D)two different markets when there is no correlation between the markets.

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Definitions:

Variable Input

An input in the production process that can be adjusted in the short term, such as labor or raw materials.

Average Total Cost

The sum of all production costs (both fixed and variable) divided by the total quantity of units manufactured.

Demand

The desire of consumers to purchase goods and services at given prices, which is a fundamental concept in economics determining market dynamics.

Long-Run Average Cost Curve

A graphical representation showing the minimum average cost at which any output level can be produced when all inputs are variable in the long run.