"Goods move in response to price differences from points of low to points of higher price, the movement tending to obliterate the price difference and come to rest"

This quote by Frank Knight is describing the principle of rate arbitrage, which is the process of purchasing items at a lower price in one market and after that selling them at a greater cost in another market. This process is driven by the reality that goods move from points of low rate to points of greater price in reaction to the price difference between the 2 markets. This motion of goods is what tends to eventually remove the cost distinction in between the two markets, as the items will ultimately come to rest at a price that is equal in both markets. This concept of cost arbitrage is an important part of the functioning of markets, as it helps to guarantee that rates remain equivalent across different markets.