A foreign firm sells its product in the United States for $50 per unit.Its cost per unit is $60.

Question

Quizplus · Accepted Answer

While it is possible that the foreign firm is engaging in dumping, we cannot definitively conclude this based on the information provided. Other factors such as the firm's overall pricing strategy and market conditions should also be considered before making a determination. Additionally, the cost-price difference alone is not enough evidence to prove predatory pricing, as this would require showing that the firm is deliberately trying to drive out competitors or create a monopoly. Imposing a tariff may be one potential policy response, but other options such as negotiating with the foreign government or pursuing legal action may also be appropriate depending on the circumstances.

A Foreign Firm Sells Its Product in the United States