Dynamic incremental pricing is used to avoid dumping challenges.

Question

Quizplus · Accepted Answer

Dynamic incremental pricing is an aggressive export pricing method. In this method, the firm considers fixed costs, such as domestic marketing costs, to be sunk costs and does not use them in calculating the international price. This allows the firm to charge a much lower price internationally than it does domestically. This may increase the risk of dumping challenges.

Dynamic Incremental Pricing Is Used to Avoid Dumping Challenges