Sales of digital cameras have been growing rapidly. However, most of this growth has occurred in the United States, Europe, and Japan. In anticipation of sales growth in other areas of the world, digital camera manufacturers are considering their strategies for international pricing.
(a) What are some factors that would lead the best price of a digital camera to differ between different countries?
(b) How might a digital camera manufacturer deal with the problem of gray importing in responding to these international differences in best prices for digital cameras?