The elasticity of demand for dell computers in europe

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Dell is selling 30,000 units in Europe at an average price of €1,500 per unit. Both the spot and forward exchange rates are $1.20/€. The cost of each unit in dollars is $1,300 per unit. The elasticity of demand for Dell computers in Europe is ε = 1.5.

Reconsider a depreciation of Euro (relative to US dollar) from $1.20/€ to $1.08/€. Now assume passthrough = 0.8. What is Dell’s total profit in $?

Reference no: EM131607775

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