Economics · International Trade
The Law of One Price states that:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Prices are fixed by global monopolies across all international markets
- 2Prices of similar goods always differ across countries due to exchange rate movements
- 3If transportation costs are small, the price of an internationally traded commodity must be different in all locations
- 4If transportation costs and trade barriers are negligible, identical goods must sell for the same price in all locations when expressed in a common currency✓
Correct answer
If transportation costs and trade barriers are negligible, identical goods must sell for the same price in all locations when expressed in a common currency
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