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Makale Özeti:
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When identical commodities are being exchanged between two or more markets,
the prices of those commodities should be equal according to the law of one price,
with the only difference in the transport cost between those markets. Therefore, in
the perfectly integrated economy, local demand has no impact onto the formation
of the market price, and once changes in local demand occur, the prices are being
equalized in the national market through efficient allocation of resources (Pareto
efficiency). Quantity supplied is being adjusted by shifting goods towards the
markets with higher demand. This represents “the first fundamental theorem of
welfare economics”, which is confirmation of Adam Smith's "invisible hand". The
concept is further expanded first by Stigler, explaining the relevance of market
information for the purpose of increasing market efficiency. When there is lacking
significant market information, agents in the market cannot engage in optimal
arbitrage and the price dispersion is present, so therefore markets are not efficient
(Stigler, 1961).
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