Activity: Testing the Law of One Price Online
You can personally test the Law of One Price by investigating the online prices for a standardized product, such as a specific book, game, or household appliance. For instance, you could select a textbook used in your courses and use the internet to compare its selling price across various online suppliers.
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CORE Econ
Ch.8 Supply and demand: Markets with many buyers and sellers - The Economy 2.0 Microeconomics @ CORE Econ
Introduction to Microeconomics Course
The Economy 2.0 Microeconomics @ CORE Econ
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Activity: Testing the Law of One Price Online
An online price comparison tool shows that an identical, brand-new smartphone model is being sold by various reputable retailers at prices ranging from $750 to $950. Economic theory might predict that intense online competition would force these prices to converge toward a single, lower price. What is the most logical conclusion to draw from the observed range of prices?
Online Retail Pricing Strategy
Explaining Price Differences in Online Markets
The widespread availability of online price comparison tools for a specific, standardized product (like a popular video game) guarantees that all online retailers will eventually sell that product at the exact same price.
Strategic Online Pricing
Economic theory might predict that a standardized product sold online would have a uniform price everywhere due to easy comparison. In reality, prices often vary significantly. Match each factor below to its most likely effect on the range of prices observed for an identical product across different online retailers.
Online Retail Pricing Strategy Decision
Explaining Online Price Variation
The continued existence of a wide range of online prices for an identical, standardized product suggests that many consumers exhibit limited price __________, allowing retailers with different price points to coexist.
Consumer Choice in Differentiated Online Pricing
Learn After
Analyzing and Explaining Deviations from the Law of One Price Online
A student is looking to purchase a new, factory-sealed copy of the video game 'Stellar Odyssey' for a specific gaming console. They use a price comparison website and find the following offers from five different reputable online retailers, with all prices including standard shipping: Retailer A: $59.99, Retailer B: $52.50, Retailer C: $59.95, Retailer D: $48.75, Retailer E: $55.00. Based only on this information, what is the most logical conclusion the student can draw about the online market for this specific product?
A consumer's preferences for goods X and Y are represented by the utility function U(X, Y) = 10√X + Y. Consider two consumption bundles: A = (25, 10) and B = (25, 30). How does the Marginal Rate of Substitution (MRS) at bundle A compare to the MRS at bundle B?
Interpreting Online Market Data
Analyzing Online Price Variation
Designing an Online Price Investigation
Economic Sovereignty and Foreign Influence
You want to investigate whether a specific, brand-new, factory-sealed textbook ('Principles of Economics, 10th Edition, Hardcover') is sold at a single price across different online retailers. Arrange the following actions into the most logical sequence for conducting this investigation.
An economics student decides to test the idea that an identical good should sell for the same price everywhere. They choose a specific product: a new, 128GB, 'Midnight' color model of a popular smartphone. The student searches on a single major online marketplace and finds five listings from different third-party sellers with varying prices. The student concludes that the observation of different prices for the exact same phone model proves the economic principle is flawed. Which of the following statements identifies the most critical weakness in the student's conclusion?
The widespread availability of online price comparison tools ensures that identical, brand-new products will be sold at the same price by all online retailers, perfectly upholding the principle that an identical good should sell for the same price everywhere.
When investigating the online prices for a standardized product, an observer often finds that the price is not uniform across different sellers. Match each potential reason for this price variation with its correct description.