law of one price

Definitions

Economics

  • noun a general rule that where the same good is sold in different markets its price will be the same. If the prices do vary then arbitrageurs will intervene and correct the price differential.

Health Economics

  • (written as Law of One Price)
    A regularity that is often predicted by economic theory (though less frequently observed in practice) to the effect that a good that can be cheaply transported (like a pharmaceutical) and that is sold in international markets (like a pharmaceutical) will sell at the same price in all markets (unlike pharmaceuticals despite their trivial transport costs).
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