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Gacci produces luxury shoes (loafers) in Italy and exports them to the United States. Last year the exchange rate was $1.25/euro and Gacci charged
Gacci produces luxury shoes (loafers) in Italy and exports them to the United States. Last year the exchange rate was $1.25/euro and Gacci charged € 500 per pair of shoes in Europe and $625 per pair of shoes in the United States. Currently the spot exchange rate is $1.45/euro and Gacci is charging $680 per pair of shoes. What is the degree of pass through by Gacci on their shoes?
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Microeconomics Principles, Problems and Policies
Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn
20th edition
978-0077660819, 77660811, 978-1259450242
