6. In the exchange rate model in Example 7.2, supposethe company continues to manufacture its product inthe United States, but now it sells its product in theUnited States, the United Kingdom, and possibly othercountries. The company can independently set its pricein each country where it sells. For example, the pricecould be $150 in the United States and £110 in theUnited Kingdom. You can assume that the demandfunction in each country is of the constant elasticityform, each with its own parameters. The question iswhether the company can use Solver independently ineach country to find the optimal price in this country.(You should be able to answer this question withoutactually running any Solver model(s), but you mightwant to experiment, just to verify your reasoning.)
6. In the exchange rate model in Example 7.2, 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 price
could be $150 in the United States and £110 in the
United Kingdom. You can assume that the demand
function in each country 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.)
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