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Assume the US government imposes tariffs on Chinese made batteries sold in the US. Assume you run the US Edison businesses and buy batteries from
Assume the US government imposes tariffs on Chinese made batteries sold in the US. Assume you run the US Edison businesses and buy batteries from China. Which of the following is FALSE?
A) You could hope for a weaker Chinese currency.
B) You could offset the tariff if you are able to raise prices without hurting demand.
C) The exchange rate does not matter because it is a government imposed policy.
D) If you have a competitor that manufactures the cars and the batteries in the US, you may have to choose between profits and market share.
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