A foreign company, partially owned by that foreign government, manufactures televisions in the foreign country. The cost to the company for the manufacture of the product is the equivalent of $60 in the U.S. Because of excess production, the firm exports 50,000 sets to the United States where they are sold for $75 each. If the nearest rival U.S.-made set sells for $85, the action of the foreign company:

Question

Quizplus · Accepted Answer

The action of the foreign company appears to be legal as it does not necessarily constitute price-fixing, violate the GAAT anti-dumping provisions, or the Sherman Act simply based on the information provided. Selling a product at a lower price than competitors, even if it is below the domestic market price, does not automatically imply illegal activity without further evidence of intent to monopolize, predatory pricing, or a violation of specific international trade agreements.

A Foreign Company, Partially Owned by That Foreign Government, Manufactures