Two pricing strategies that will often trigger allegations of dumping is if the home-country firm sets a price in the foreign market below what it charges the domestic market or if the price is above what it domestically charges, but below the marginal cost to ship it overseas and sell it there.

Question

Quizplus · Accepted Answer

This statement is true. Dumping is the practice of selling goods in a foreign market at a lower price than they are sold in the domestic market or below their production cost. Therefore, if a home-country firm sets a price in the foreign market below what it charges the domestic market, it may be accused of dumping. Additionally, if the price is above what it domestically charges but below the marginal cost to ship it overseas and sell it there, it is still considered dumping.

Two Pricing Strategies That Will Often Trigger Allegations of Dumping