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Business, 27.02.2020 00:35 jujulakaeuaws
Suppose the price of a pound of flax seed is currently $1.20 in both Kentucky and West Virginia. Further, suppose there is a decrease in demand for flax seed in Kentucky, but not in West Virginia. Before flax seed sellers are able to adjust the relative quantity of flax seed supplied in the two states, the decrease in demand causes the equilibrium price of a pound of flax seed in Kentucky to change by $0.20. The law of one price suggests that the price of a pound of flax seed will be in West Virginia after sellers adjust the relative quantity of flax seed supplied in the two states.
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Suppose the price of a pound of flax seed is currently $1.20 in both Kentucky and West Virginia. Fur...
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