Use the Table for the Question(s)below

question 66

Multiple Choice

Use the table for the question(s) below.
Consider the following prices from a McDonald's Restaurant:
-A McDonald's Big Mac value meal consists of a Big Mac Sandwich,Large Coke,and a Large Fry.Assuming that there is a competitive market for McDonald's food items,at what price must a Big Mac value meal sell to ensure the absence of an arbitrage opportunity and uphold the law of one price?

• A)$4.08
• B)$4.38
• C)$5.47
• D)$5.77

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Definitions:

Supply Curve

A visual chart that illustrates the correlation between a product's price and the amount that producers are prepared to offer for sale.

Winner-Take-All Markets

Markets in which the top performers capture a significantly larger share of the rewards, often leaving little for others.

Robert Frank

An American economist known for his work in the areas of microeconomics and behavioral economics, particularly relating to consumer behavior and the economics of well-being.

Chief Executive Officers

Top executives in charge of managing an organization's overall operations and making major corporate decisions.