Suppose Mexico is a major export market for your U.S.-based company and the Mexican peso appreciates drastically against the U.S.dollar.This means
A)your company's products can be priced out of the Mexican market,as the peso price of American imports will rise following the peso's fall.
B)your firm will be able to charge more in dollar terms while keeping peso prices stable.
C)your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports.
D)your firm will be able to charge more in dollar terms while keeping peso prices stable and your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports.

Question

Quizplus · Accepted Answer

The appreciation of the Mexican peso against the U.S. dollar means that the peso price of American imports will fall, making them cheaper for Mexican consumers. This will allow your firm to charge more in dollar terms while keeping peso prices stable, and your domestic competitors will enjoy a period of facing lessened price competition from Mexican imports.

Suppose Mexico Is a Major Export Market for Your U