Sudhir Yadav lives in a city in country Z. The city has a big Indian population. When Sudhir was looking for a business oppurtunity he identified a niche market in selling saris and similar clothes to Indian ladies. He imports the clothes from country X and sells them to retailers in his city.
Sudhirs business is that of a wholesaler. Why do you think that retailers in country Z don’t buy their clothes directly from the suppliers?
If the currency of country Z appreciated in value how would this affect the profitability of Sudhir’s business? Explain your answer.
THANK YOU IN ADVANCE! xxx