When the pizza company, Pizza Patron, decide to accept pesos as a payment, Mexicans are more willing to shop in their shops. Their marginal utility to spent on one more pizza from Pizza patron is high. Therefore, the total utility is high. Some Mexican-Americans or illegal Mexican-immigrants goes to visit their relatives in Mexico in the weekends. When they came back to US, they don’t know where to spend the Mexican Pesos. Because most of the shops in US only accept US dollars. Pizza Patron becomes their choice to spend money on. Mexicans prefer to spent money on the Pizza patrons. It is convenient for Mexicans to directly spent Peso instead of exchange it into US dollars.
The company accepts peso but give the customers change in US dollars. If the exchange rate in US and Pesos gets higher, the pesos became less valuable than before. The company earned less money. If the rate gets lower, the Pesos became more valuable, then the company could earn money. Furthermore, people are less willing to spend pesos if the exchange rate is high. They will probably lose money if they decide to spend pesos instead of US dollars. Their budget line to buy pizzas in Pesos shifts to the right.
I think it is good for the Pizza Company to accepts Pesos. However, Americans think they don't have comparative advantage on producing the pizza. Therefore, they don't accept Pesos. Countries are protective of their industries. If the industries doesn't make them money, they are less willing to accept others to be in the same industry.
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