An issue with devaluation discussed in the material is that producers may not pass devaluation to customers.

• A. Takes a while for things to change
• B. Producers may not pass devaluation (lower prices) to customers
• C. Doesn’t affect inelastic demand
• D. Doesn’t promote efficiency or stimulate interest

Answer: (B)

The key idea here is how exchange-rate changes pass through to consumer prices. When a country devalues, import and production costs for many firms rise. Whether those higher costs are reflected in higher prices for customers depends on pricing power and demand. If competition is strong or customers are price-sensitive, firms may choose to absorb some of the increased costs rather than raise prices, at least in the short term, to protect sales and market share. This incomplete pass-through is the issue described: producers may not pass devaluation fully to customers. The other options are less about this pricing channel—the timing, impact on demand elasticity, or broader efficiency effects—so they don’t capture the main point as directly.