The Law of One Price, an Economic Principle, Means That

question 32

Multiple Choice

The law of one price, an economic principle, means that the price of a product in different markets should be:

• A)the same if the raw materials were obtained from a single source.
• B)the same if adjusted for inflation.
• C)the same if taxes are adjusted based on a single currency.
• D)the same if there are no significant costs associated with moving between markets.

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Definitions:

Merchandise Return

Goods returned by the buyer to the seller after purchase due to defects, dissatisfaction, or other reasons, often resulting in a reversal or adjustment of the initial sale transaction.

Sales Tax

A government-imposed tax on sales of goods and services, paid by the purchaser and collected by the seller.

Credit Customer

A customer who purchases goods or services on credit, paying at a later date rather than at the time of sale.

Payment Terms

The conditions under which a seller will complete a sale. Typically, these terms specify the period allowed to a buyer to pay off the amount due and may include cash discounts for timely payment.