Arbitrage Is the Act of Buying at a Low Price

question 240

True/False

Arbitrage is the act of buying at a low price and selling at a high price, which makes the practice of price discrimination even more profitable.

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Definitions:

Total Surplus

The sum of consumer surplus and producer surplus, representing the total net benefit to society from a market transaction.

Equilibrium Price

A market condition where supply meets demand, and there is no inclination for price to change, leading to market balance.

Mutually Beneficial Trades

Exchanges that occur when all parties involved gain benefits or profits from the transaction.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total net benefit to society from trade.