The APT Is Based on the Law of One Price

question 73

True/False

The APT is based on the law of one price, which states two identical assets cannot sell at different prices.

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Definitions:

Marginal Benefit

The added gratification or usefulness that an individual acquires from the consumption of an additional unit of a good or service.

Marginal Benefit Curve

A graphical representation showing how the benefit to consumers changes with each additional unit consumed.

Total Benefit

The entire value or advantage received from consuming a good or service.

Marginal Benefit

The increased happiness or advantage someone gets from using another unit of a certain good or service.