Why Do Companies Charge More for the Same Product in Different Countries?

Imagine you're selling candy. If you live in a town where everyone has lots of money, you might charge more for your candy than if you lived somewhere with fewer people who can pay. Companies do something similar but on a much bigger scale, they change prices depending on how rich or poor different countries are, and even based on the value of their money compared to other countries.

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Examples

  1. A toy that costs $10 in the U. S. might cost €12 in France because of exchange rates.
  2. The same brand of coffee is more expensive in New York than it is in São Paulo.
  3. A smartphone sold for ¥60,000 in Japan might be priced at $450 in America.

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