What Does the "Law of One Price" Stipulate

question 57

Multiple Choice

What does the "law of one price" stipulate?

• A)Assets with the same attributes should sell for the same price in a perfect market.
• B)Everyone should be able to borrow and lend at the same interest rate.
• C)All investors must be price-takers.
• D)A company must sell its products to everyone at the same price; that is, price discrimination is illegal.

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Definitions:

Recursive Definition

A definition of a function, sequence, or process in which the next term is defined in terms of previous terms.

Common Difference

The consistent difference between consecutive terms in an arithmetic sequence.

Common Difference

The difference between successive terms in an arithmetic sequence.

Arithmetic Sequence

An arithmetic sequence is a sequence of numbers in which each term after the first is obtained by adding a constant difference to the preceding term.