Suppose two countries, A and B, are at war with each other. Country A is very wealthy; country B is very poor. The XYZ Co produces tanks
Is XYZ able to set a different price for the tank sold to country A than the price for the tank sold to country B? Explain.
XYZ can practice multimarket price discrimination. There are two identifiable segments with different elasticities. Since the two countries are at war, resale is doubtful.
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A situation in which money buys the same amount of goods and services in different currencies is called
A) a fixed exchange rate. B) purchasing power parity. C) exchange rate surplus. D) exchange rate equilibrium. E) exchange rate balance.
If the consumption of sugar does not change at all following a price increase from 50 cents per pound to 65 cents per pound, the demand for sugar is considered to be
A) relatively inelastic. B) perfectly elastic. C) perfectly inelastic. D) unitary elastic.