When foreign producers sell at prices below their marginal production cost, either by making losses or with the assistance of government subsidies, this is an example of dumping.

Question

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Dumping occurs when manufacturers export a product to another country at a price either below the price charged in its home market or below its cost of production, often with the aim of increasing market share in a foreign market or driving out competition.

When Foreign Producers Sell at Prices Below Their Marginal Production