You Are Watching TV Late One Night and See an Ad

question 7

Short Answer

You are watching TV late one night and see an ad from Ronco for the Dial-o-matic food slicer.You learn that the Dial-o-matic sells for $29.95.But wait,there's more! Ronco is also including in this deal a set of Ginsu steak knives worth $10.95 and another free gift worth $7.95.Assuming that there is a competitive market for Ronco items,at what price must Ronco be selling this three item Dial-o-matic deal to ensure the absence of an arbitrage opportunity and uphold the Law of One Price?

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Definitions:

Empathy

The ability to understand and share the feelings of another person.

Remorse

A profound sense of remorse or culpability for an offense made.

Antisocial Personality Disorder

A mental condition characterized by a long-term pattern of disregard for, or violation of, the rights of others.

Self-Mutilation

Deliberate harm or injury to one's own body without suicidal intent, often as a way to cope with psychological distress.