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Phillips NV Produces DVD Players and Exports Them to the United

Question 2

Multiple Choice

Phillips NV produces DVD players and exports them to the United States.Last year the exchange rate was $1.25/euro and Plillips charged 120 euro per player in Euroland and $150 per DVD player in the United States.Currently the spot exchange rate is $1.45/euro and Phillips is charging $160 per DVD player.What is the degree of pass through by Phillips NV on their DVD players?


A) 92%
B) 33.3%
C) 41.7%
D) 4.1%

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