Which criterion must be met to identify if an imported product is being
Dumped on the home country?
I.The foreign firm sells the product at a lower price in the home
Market.
II.The foreign firm sells the product below average cost in the home
Market.
III.The foreign firm raises the price in the home country.

Question

Quizplus · Accepted Answer

Dumping is defined as a situation where a foreign firm sells its products at a lower price in the home market than the price it sells in the exporting country. Therefore, criterion I must be met. Moreover, if the foreign firm sells the product below average cost, it indicates that the firm is using unfair practices to get an advantage in the home market. Therefore, criterion II must also be met. However, criterion III does not indicate dumping since it implies an increase in the price of the product in the home market. Therefore, the correct answer is C.

Which Criterion Must Be Met to Identify If an Imported