The level of uncertainty will depend on several factors: the nature of the functional form used in the multivariate analysis; the type of econometric technique employed; the appropriateness of the statistical assumptions embedded in the model or technique; the comprehensiveness of the variables included in the analysis; and the accuracy of the data that are utilized. [...] It is less common to find research that examines how the deviation from the LOP at the industry level is related to industry characteristics, such as the nature of domestic market competition, the extent of product differentiation, the degree of trade orientation, and the difference in productivity growth. [...] An investigation of the applicability of the PTM model to Canada helps us to understand the mechanism and magnitude of international price transmissions. [...] Each chooses its optimal price to maximize its profit, given information on the rival firm’s price, its own cost of production, the level of technology, the overall strength of the economy and the characteristics of the market (s(H, F/H, θ)). [...] The term, s(H, F/H, θ), captures the effect of the competitiveness of the markets, the substitutability of foreign and home products, and the degree of import penetration.