Which market involves buying in low-price regions and reselling in higher-price regions?

• A. Domestic Market
• B. Parallel Market
• C. Global Market
• D. Gray Market

Answer: (B)

The main idea being tested is exploiting price differences across regions through arbitrage. Buying goods where prices are low and selling them where prices are higher is a classic regional arbitrage move. When this happens across borders or between different markets outside the official distribution channels, it’s commonly called a parallel market. This term captures the practice of taking advantage of regional price gaps by moving goods from lower-price regions to higher-price regions for profit, often bypassing authorized channels.

Domestic markets involve trades within one country, not leveraging cross-regional price gaps. A global market refers to international trade through official, widely recognized channels, not specifically about targeting price differences between regions. The gray market is similar in that it involves non-official distribution, but the emphasis in this scenario is on cross-region price disparities and reselling to capitalize on them, which aligns with the parallel market concept.