Question: Consider once again the digital watch numerical example. a. Suppose U.S. demand for watches increases to Q-65-2Py at the same time that the dollar depreciates

Consider once again the digital watch numerical example.

a. Suppose U.S. demand for watches increases to Q-65-2Py at the same time that the dollar depreciates from 100 per dollar to V90 per dollar. Find the dollar price of watches and the amount of U.S. watch imports.

b. Does the dollar depreciation offset the impact of the increased U.S. demand for watches? Explain.

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