Andre owns a business that exports goods to france. he has traveled to france on numerous occasions and has developed a taste for fine french wines. andre has just heard a report on the radio that indicates that the dollar has fallen dramatically relative to the french franc. andre can expect that:

In the short-run, Andre can expect that his sales revenue and his profit will increase.

In the long-rung,Andre's level of sales revnue and profit will decrease as the US dollar get stronger as a result of French wine manufacturers move their production from French to USA to enjoy a weak dollar.

Explanation:

In the short-run, as Andre revenue comes from France and thus denominated in French franc while his cost of production is in the USA and denominated in US dollar; the depreciation of US dollar to French franc means that his revenue in French franc once converted in to US dollar will be more valuable, while the cost in US dollar is kept at the same level (assuming he keeps the same cost, the same selling price and the sales quantity remains unchanged as we only examine the effect of the changes in relative value between US dollar and French franc).

Thus, Andre may enjoy the higher profit in by keeping the same selling price; or by lowering the selling price, as a result, increase sales quantity to compensate a lower margin per unit with the target to increase market share.

In the long-run, as French wine manufacturer will find it cheaper to produce wine in USA ( a French france they earn can be converted more US dollar than it used to be), they will move their production to the USA. With higher demand in the US dollar as the shift on production location takes place and higher demand on US raw material for wine production, cost of production and US dollar value will rise; causing Andre's sales revenue and profit back to the beginning level

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