In the exchange rate model in Example 7.2, suppose the company continues to manufacture its product in
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In the exchange rate model in Example 7.2, suppose the company continues to manufacture its product in the United States, but now it sells its product in the United States, the United Kingdom, and possibly other countries. The company can independently set its price in each country where it sells. For example, the price could be $150 in the United States and £110 in the United Kingdom. You can assume that the demand function in each country is of the constant elasticity form, each with its own parameters. The question is whether the company can use Solver independently in each country to find the optimal price in this country.
Exchange RateThe value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
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