If a company charges its subsidiary in a foreign country too low a transfer price, it can be accused of dumping.

Question

Quizplus · Accepted Answer

Dumping refers to a practice where a company exports its products to another country at a lower price than the price charged in its domestic market. If a company charges its subsidiary in a foreign country too low a transfer price, it can be accused of dumping, as the subsidiary can then sell the products at a lower price than local competitors in that country.

If a Company Charges Its Subsidiary in a Foreign Country