Question

A person buys X in one market and combines it with Y purchased in another market. The combination of X and Y gives Z, which the person sells in a third market for a higher price than the sum of the prices of X and Y. Which theory of profit is most consistent with this example

Answer 1

Answer:

arbitration

Explanation:

Arbitration occurs when the price of a security or a commodity varies significantly between different markets. For example, I purchase gold in the United Kingdom at a lower price than in the United States, and I bring it to the United States and make a profit. Arbitration opportunities result from market inefficiencies and a lack of a single price.