Are sellers who practice arbitrage taking advantage of buyers?
What will be an ideal response?
No, because the seller cannot charge a buyer more than the amount that the buyer is willing to pay. Furthermore, the seller has invested time, effort, and a monetary investment to locate and purchase the products. Any compensation above the transactions costs is arbitrage profit but it was earned with no coercion.
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Based on the following information, the value of the M1 measure of the money supply is ________ and the value of the M2 measure of the money supply is ________. AssetsBillions of DollarsCurrency20Demand deposits30Money market mutual funds80Travelers' checks5Savings deposits180Other checkable deposits20Small denomination time deposits110
A. $255 billion; $445 billion B. $445 billion; $445 billion C. $75 billion; $445 billion D. $55 billion; $425 billion
Firms are "price makers" if they
A) have sufficient market power to set their product price. B) make the market price their product price. C) make their product price competitive. D) None of the above
Consider an investment with the following payoffs and probabilities: State of the Economy Probability Return Stability .50 1,000 Good Growth .50 2,000 Determine the expected return for this investment
a. 1,300 b. 1,500 c. 1,700 d. 2,000 e. 3,000
Which of the following is an example of an implicit cost for a firm?
A. the value of time worked by the owner. B. any wages and salaries paid to employed. C. forgone rent on property owned by firm. D. both a and c E. all of the above