One Would Expect More Arbitrage to Occur Between Two Markets

question 115

Multiple Choice

One would expect more arbitrage to occur between two markets if:

• A) the products are differentiated in terms of their fundamental characteristics.
• B) the products have built-in tracking mechanisms that enable the discovery of the distributors.
• C) the demand curves in the two markets are essentially the same.
• D) products are non-differentiated and the different markets have good transportation networks between them.

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Definitions:

Social Norms

The unwritten rules that dictate the acceptable behavior within a society or group.

Rituals

Established sequences of activities or ceremonies performed in a particular context, often reflecting values or beliefs of a community or culture.

Predictable

Characterized by being able to be foreseen or expected based on certain indicators or patterns.

Prejudice

involves preconceived opinions or judgments formed without factual basis or experience, often leading to unfair treatment of individuals or groups.