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The law of one price holds exactly when identical goods are sold in different markets at the same price after accounting for exchange rates and transportation costs.

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8mo ago

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What factors are necessary for the law of one price to hold?

The law of one price holds when there are no barriers to trade, transportation costs are low, and there is perfect competition in the market.


Is the 'price' in the law of demand an absolute price or relative price?

In the law of demand, the "price" typically refers to the absolute price of a good or service, which is the actual monetary amount required to purchase it. However, this absolute price can influence relative prices, which compare the price of one good to another. Changes in absolute prices can affect consumer choices and demand, reflecting how individuals substitute between goods based on their relative costs. Thus, while the law of demand focuses on absolute prices, it operates within the context of relative prices as well.


Are usury law a price ceiling or a price floor?

Usury law put a ceiling on interest rate


How does a supply curve reflect the law of supply?

Companies will want to supply more goods/services at a higher price because they can make more profit this way. Therefore, the supply curve is upward sloping since at each increase in price, there will be a corresponding increase in quantity supplied. This exactly is the law of supply: businesses will supply more at higher prices.


What Importance f law of demand?

It helps to Determination of price. The study of law of demand is useful for a trader to fix the price of a commodity. And also law of demand explains consumer choice behavior when the price changes.

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What factors are necessary for the law of one price to hold?

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Is the 'price' in the law of demand an absolute price or relative price?

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