The Device Adopted to Make Profit Out of Price Differences

question 12

Multiple Choice

The device adopted to make profit out of price differences in two different markets

• A)Cornering
• B)Wash sales
• C)Rigging
• D)Arbitrage

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Definitions:

Price Floor

A legally imposed minimum price below which a good or service cannot be sold, typically above the equilibrium price, leading to surpluses.

Shortage/Surplus

A market condition where the quantity of a good or service supplied is not equal to the quantity demanded; shortages occur when demand exceeds supply, and surpluses occur when supply exceeds demand.

Price Floor

A government or regulatory-imposed minimum price that can be charged for a good or service.

Quantity Demanded

The specific amount of a good or service that consumers are willing to purchase at a given price, at a particular time.