Scelta multipla
Which of the following is a possible result of disequilibrium in a market?
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3. Supply and Demand
Overview of Supply and Demand Shifts
Scelta multipla
Market differences across regions, states, or neighborhoods create opportunities for:
A
monopsony power
B
perfect competition
C
arbitrage
D
price ceilings
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Step 1: Understand the concept of market differences. These differences can arise due to variations in demand, supply, transportation costs, or regulations across regions, states, or neighborhoods.
Step 2: Recognize that such differences create opportunities for arbitrage, which is the practice of buying a good in one market at a lower price and selling it in another market at a higher price to earn a profit.
Step 3: Recall that arbitrage helps equalize prices across different markets by exploiting price differences, thereby reducing market inefficiencies.
Step 4: Differentiate arbitrage from other options: monopsony power refers to a single buyer's market power, perfect competition is a market structure with many buyers and sellers, and price ceilings are government-imposed limits on prices.
Step 5: Conclude that the presence of market differences specifically enables arbitrage opportunities, making it the correct answer.
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