1.5 A McDonalds Big Mac Value Meal consists of aBig Mac Sandwich, Larg

QUESTION

1.5 A McDonalds Big Mac Value Meal consists of aBig Mac Sandwich, Large Coke, and a Large Fry. Assume thatthere is a competitive market for McDonalds food items and thatMcDonalds sells the Big Mac value meal for $4.79. Considerthe following prices from a McDonalds Res
McDonalds sells the Big Mac valuemeal = $4.79 Big Mac Value meal consists of : Big MacSandwich $2.99 LargeCoke $1.39 LargeFry $1.09 —— Current Value of Big Mac ValueMeal $5.47 —— McDonalds sells the Big Mac Valuemeal $4.79 Current Market Value of Big Mac ValueMeal $5.47 —— $0.68 ——-

here there is no arbitrage opportunity. Big MacValue meal selling price ($4.79) is less than the the currentmarket price ($5.47) , therefore there is no arbitrage opportunity exists.I hope it may help you

ANSWER:

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