Find the price of a Big Mac at your local McDonald’s in the United States
Find the price of a Big Mac at your local McDonald’s in the United States
The country chosen based on my last name is Brazil. The price of a Big Mac at the local market in Brazil is 20.90 which translates to $ 3.91. The price of Big Mac at my local McDonald’s in the US is 69% more expensive of the price set in Brazil. For business people, the best idea is to import the Big Mac from Brazil rather than exporting. In business practice, profits are generated when business players buy at cheaper prices and target market where the products can be sold at a higher price. That allows them to earn profit. In this case, the price of the product is 69% higher in the US than in Brazil. Buying the Big Mac at a dollar in Brazil and then selling them at 69 dollars is an attractive business for any business player.
Despite the existence of tariffs and import expenses, importing is still way better for a business player since it allows generation of better profits. Exporting is not favorable because it will mean the business person buys the same products at $ 69 dollars in the US only to go and sell it at a dollar in Brazil. This would be a 69% loss to anyone doing exports. Therefore, if I am the business person, the most feasible way to earn more profits, of approximately 69% is to invest in product imports as opposed to export. Besides the percentage of the US prices, the value of the Brazilian currency is not as strong when compared to the dollar. Consequently, few dollars can be used to import a significant number of Big Mac which is a good strategy in business.
ESSAY Theories of Exchange Rate Determination
Find the price of a Big Mac at your local McDonald’s in the United States
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