Rolls-Royce is struggling with its pricing strategy with a number of its major customers in Continental Europe, particularly Airbus. Since Rolls-Royce is a British company with most manufacturing of the Airbus engines in the United Kingdom, costs are predominantly denominated in British Pounds. But in the period shown, 2007-2009, the pound steadily weakened against the euro. Rolls-Royce has traditionally denominated its sales contracts with Airbus in Airbus' home currency, the euro.

a. Assuming each Rolls-Royce engine marketed to Airbus costs £22.5 million each, how has the price of that engine changed over the period shown?

b. What is the cumulative percentage change in the price of the engine in euros for the three year period?

c. If the price elasticity of demand for RR turbine sales to Airbus is relatively inelastic, and the price of the engine in British pounds never changes over the period, what does this price change mean for Rolls-Royce's total sales revenue on sales to Airbus of this engine?

d. Compare the prices and volumes for the first quarter of each of the three years shown. Who has benefited the most from the exchange rate changes?