U.S. based Majestic Co. sells products to U.S. consumers and purchases all of its materials from U.S. suppliers. Its main competitor is located in Belgium. Majestic Co. is subject to:

Question

Quizplus · Accepted Answer

Majestic Co., despite operating and sourcing within the U.S., is subject to economic exposure because changes in exchange rates can affect its competitive position relative to its foreign competitor. If the U.S. dollar strengthens, the Belgian competitor's products could become cheaper in comparison, potentially affecting Majestic Co.'s sales and profitability.

US Based Majestic Co