Jitensha Bike Parts was called to testify before the U.S. Congress. The CEO of Jitensha defended the company against an accusation that it was dumping parts on the U.S. market. In her testimony, the CEO claimed ________. Using traditional guidelines, Congress determined that Jitensha was not dumping.
A) Jitensha includes 10% overhead costs and an 8% profit margin in the price of all the parts they export to the U.S.
B) Japan runs a trade deficit with the U.S. in bike parts.
C) Jitensha is a staunch supporter of free trade.
D) Jitensha sells more bike parts in Europe than it does in the U.S.

Question

Quizplus · Accepted Answer

Dumping is the practice of selling products in foreign countries for less than you charge for the same products in your own country. U.S. laws against dumping are specific and require foreign firms to price their products to include 10% overhead costs plus an 8% profit margin. Since Jitensha priced its parts using this formula it was not practicing dumping.

Jitensha Bike Parts Was Called to Testify Before the U