A firm would increase profits from dumping if it charged a lower price at home, where demand is inelastic, and a higher price abroad, where demand is elastic.

Question

Quizplus · Accepted Answer

Dumping involves selling a product at a lower price abroad where demand is elastic and at a higher price at home where demand is less elastic, not the other way around. This strategy is used to maximize profits by taking advantage of different price sensitivities in different markets.

A Firm Would Increase Profits from Dumping If It Charged