In July 2001,the euro's value relative to the dollar was about €1.00 = $0.85.By November 2009,the euro had strengthened to €1.00 = $1.48.In February 2012,one euro was equal to $1.33.All other things being equal,if a European-based global company wants to preserve margins for goods exported to the U.S.market,the company should:
A) raise prices in dollars.
B) switch to cost-based pricing.
C) adopt a policy of market penetration pricing.
D) reduce prices in dollars.
E) use skimming pricing.

Question

Quizplus · Accepted Answer

To preserve margins when the euro strengthens against the dollar, the company should raise prices in dollars to offset the reduced value of dollar revenues when converted back to euros.

In July 2001,the Euro's Value Relative to the Dollar Was