Final answer:
If the domestic price level in the United States is higher compared to other countries, a company may be unable to determine the ultimate price of a product when exporting.
Step-by-step explanation:
The ultimate price of a product may be difficult for a company to determine when exporting it from the United States to another country if the domestic price level in the United States is higher compared to price levels in other countries. This is known as the foreign price effect.
When prices rise in the United States but remain fixed in other countries, goods in the United States become relatively more expensive compared to goods in the rest of the world. As a result, U.S. exports become relatively more expensive, leading to a decrease in the quantity of exports sold.