A firm granting lifetime employment to its workers has the incentive to engage in international dumping during periods of business recession and excess production capacity.

Question

Quizplus · Accepted Answer

By engaging in international dumping, the firm can offload excess inventory and maintain production levels without negatively impacting domestic prices or sales. Additionally, since the workers have lifetime employment, the firm may be less concerned with short-term profitability and may prioritize maintaining full employment levels.

A Firm Granting Lifetime Employment to Its Workers Has the Incentive