Multiple Choice
The following two graphs depict the equilibrium price of a pound of grapes in California and West Virginia, respectively. Assume the type and quality of the grapes being sold in the two states are identical. Further, assume grape sellers incur zero costs to transport grapes between the two states and there are no other barriers to trade. Use these graphs to answer the following questions. 
-Which of the following pairs of prices is consistent with the law of one price?
A) California price: $0.50; West Virginia price: $0.80
B) California price: $0.80; West Virginia price: $0.80
C) California price: $1.20; West Virginia price: $1.20
D) California price: $1.35; West Virginia price: $1.35
E) California price: $1.50; West Virginia price: $1.50
Correct Answer:
Verified
Correct Answer:
Verified
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