Scenario #1: Calculate profits in both £ and €
Scenario #2: Assume UK subsidiary increases its price to UK buyers by £ 235 per unit. Assume consumer price elasticity is 1.1. Calculate profits in both £ and €.
Scenario #3: Assume consumer price elasticity is .8. Again, calculate profits in both £ and €.
Which of the 3 scenarios should Montague choose?
What is the perspective of the Italian headquarters?
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