2. If demand for a firm's products is highly elastic,

a. the firm would be able to easily pass higher costs related to exchange rate fluctuations on to consumers.

b. quantity of products sold by the firm would not be affected by unfavorable changes in exchange rates.

c. the firm will be unable to pass increased costs resulting from unfavorable changes in the exchange rate without significantly lowering the volume of products sold.

d. the firm will be able to raise prices following unfavorable changes in the exchange rate without significantly lowering sales volumes.