Use the table for the question(s) below.
Consider the following prices from a McDonald's Restaurant:
Big Mac Sandwich | $2.99 |
Large Coke | $1.39 |
Large Fry | $1.09 |
A McDonald's Big Mac value meal consists of a Big Mac sandwich, large Coke, and a large fry. Assuming that there is a competitive market for McDonald's food items, at what price must a Big Mac value meal sell to insure the absence of an arbitrage opportunity and uphold the Law of One Price?
◦ $4.08
◦ $4.38
◦ $5.47
◦ $5.77