A Person Buys X in One Market and Combines It

question 120

Multiple Choice

A person buys X in one market and combines it with Y purchased in another market. The combination of X and Y gives Z, which the person sells in a third market for a higher price than the sum of the prices of X and Y. Which theory of profit is most consistent with this example?

• A)Profit is the return to being alert to an arbitrage (broadly defined)opportunity.
• B)Uncertainty is the source of profit.
• C)Profit is the return to the entrepreneur as innovator.
• D)There is not enough information provided to answer this question.

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Definitions:

Fraud

Deliberate misleading actions taken to benefit oneself or harm another person.

Criminal Prosecution

The process by which a person is charged, tried, and possibly convicted of a crime by the government.

Civil Prosecution

A legal process initiated by a private individual or entity, not by the state, to seek remedy for a wrong.

Tortious Conduct

Actions that result in harm or injury to another party, for which the injured party may seek compensation through a civil lawsuit.