A firm that faces problems of falling sales and excess productive capacity might resort to international dumping if it

Question

Quizplus · Accepted Answer

Dumping involves selling goods in a foreign market at a price lower than the domestic market or below the cost of production. If the revenues from foreign sales cover at least the variable costs, the firm can still benefit from dumping by contributing to fixed costs and reducing losses associated with unsold inventory or underutilized productive capacity.

A Firm That Faces Problems of Falling Sales and Excess