Suppose the company continues to manufacture its product in the United States, but now it sells its
Question:
Suppose the company continues to manufacture its product in the United States, but now it sells its product in the United States, the united Kingdom, and possibly other countries. The company can independently set its price in each country where it Sells. For example, the pace coup be $150 in the United States and ₤110 in the United Kingdom. You can assume Mat the demand function in each count, is of the constant elasticity form, each with its own parameters. The question is whether the company can use solver independently in each country to find the optimal price in this country. (you should be able to answer this question without actually running any Solver model(s), but you might want to experiment, just to verify your reasoning.
Put now assume that Madison manufactures its product in the United States and sell it In the United Kingdom (UK). Given the prevailing exchange We in dollars per pound, Madison wants to determine the price In pounds it should charge in the UK so that its profit in dollars is maximized. The company also want to see how the optimal price and the optimal profit depend On exchange rate fluctuations.
Objective To use a nonlinear model to find the price In pounds that maximizes the profit in dollars
Principles of Corporate Finance
ISBN: 978-0072869460
7th edition
Authors: Richard A. Brealey, Stewart C. Myers