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Hi Sir,
A question from Pre-June Mock exam
How the the foreign company will have the an advantage in the UK market when the currency of the foreign competitor become weaker compared to sterling against the UK based company .
How the competitor will have advantage in the UK market when has to pay more for buying sterling.
shouldn’t it be the opposite.
Thanks,
The competitor will not be buying sterling.
Suppose that a US company is selling something in the UK. The price of what they are selling is $100, and the exchange rate is currently $2 to the Pound. That means the UK customer will be paying 50 Pounds.
Suppose that the dollar weakens so there are now $3 to the Pound. That means that for the same item the UK customer will only have to pay 100/3 = 33.3 Pounds.
Hello Sir,
Does it mean that he a competitor the UK pound- based company as a supplier to UK market ?,
Thanks,
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