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Arbitrage occurs when an entity purchases a good in the lower-priced market and sells it at the same time in the higher-priced market. The existence of trade costs would ____ opportunities for arbitrage.
Absorption Costing
A costing technique that incorporates all costs associated with production, including both fixed and variable expenses, into the product's price.
Income Increase
A rise in the amount of money earned from various sources, including work, investments, or business operations.
Variable Costing
A costing method that includes only variable costs—costs that change with production levels—in the calculation of product costs.
Net Income
The total profit of a company after subtracting all expenses from total revenues, reflecting the company's financial performance over a given period.
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