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It sounds like law of one price only refers to goods where there is an arbitrage opportunity. If the goods have different intrinsic values, then they would have
by ghayes 9y ago
It sounds like law of one price only refers to goods where there is an arbitrage opportunity. If the goods have different intrinsic values, then they would have different prices, which I believe is what the original comment is arguing.
- rpenm 9y agoPrice discrimination is when a producer charges different customers different prices for the same good. So yes, price discrimination is implicitly an arbitrage opportunity - assuming there is competition. Truly different goods don't have the same implications for consumer and producer surplus. That's not to say that price discrimination can't be disguised.