If you travel to Mexico you will often see currency exchange businesses along the way as you approach the border
Even though each of these businesses is essentially "selling" the same product (i.e. Mexican pesos) how is it that some of them are able to charge more for the peso than others?
As tourists get closer and closer to the border their elasticity of demand for the peso becomes more inelastic. Therefore, currency exchange shops that are located closer to the border are able to sell the peso for a higher price since they realize that the tourist's options are getting smaller and smaller.
You might also like to view...
Monetizing the debt is a way of turning debt into money and reducing the burden of the debt
a. True b. False Indicate whether the statement is true or false
(Consider This) Suppose that salsa manufacturers sell 2 million bottles at $3.50 in one year and 3 million bottles at $3 in the next year. Based on this information, we can conclude that the:
A. law of supply has been violated. B. law of demand has been violated. C. demand for salsa has increased. D. supply of salsa has increased.