Figure 14.1 US market for Imported Toyotas
In Figure 14.1, D represents the US demand curve for Toyotas and MC0 represents the marginal cost of producing Toyotas. Assume that Toyota behaves like a monopolist in the US market. A shift in the marginal cost curve from MC0 to MC1 leads to
A. a complete pass-through ot the depreciation of the dollar
B. a complete pass-through of the appreciation of the dollar
C. a partial pass-through of the depreciation of the dollar
D. a partial pass-through of the appreciation of the dollar
Answer: D
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