Brazil and Peru sell coffee in the U.S. for $10 per pound. The Brazilian Real falls...

Brazil and Peru sell coffee in the U.S. for $10 per pound. The Brazilian Real falls from R$4:$1 to R$6:$1 while the Peruvian Sol stays at the same level of Sol 3:$1. It cost 20 R$ per pound to get the coffee to the store shelf. You are the head of Brazil Coffee Co. When the currency falls, your marketing chief tells you that if you lower the price to $8 per pound, you could sell 50% more pounds of coffee. Should you follow the advice from marketing? Assume your costs per pound do not change. Note: Brazil can pursue two strategies: Margin (make more money per pound) or Market Share (lower price to make same profit)

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jeff jeffy answered 6 months ago

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