What is anti-dumping?

What is anti-dumping?

• A. Reducing prices to increase sales
• B. Flooding the market with products at lower prices
• C. Charging extra duties on exported goods
• D. Restricting sales based on seasonal demand

Answer: (B)

Anti-dumping refers to a trade practice where a country imposes measures to prevent foreign manufacturers from selling goods in its market at prices that are significantly lower than their normal value, often referred to as "dumping." The definition of dumping typically includes selling products at a price lower than the cost to produce them in the company's home market, which can harm domestic industries. When a foreign company floods the market with products at lower prices, it is typically attempting to gain market share or eliminate competition, which can hurt local businesses that cannot compete with these artificially low prices. By opting for this strategy, the foreign producer seeks to gain a foothold in the market to eventually raise prices once domestic competition has been weakened or eliminated. Thus, addressing this issue is crucial for maintaining fair competition and protecting the economic interests of domestic producers. The other options do not accurately capture the essence of anti-dumping. Reducing prices to increase sales refers to a legitimate competitive business strategy rather than an unfair trade practice. Charging extra duties on exported goods does not directly pertain to anti-dumping measures, which focus on imports sold at unfairly low prices. Lastly, restricting sales based on seasonal demand deals with inventory and sales management rather than trade practices aimed at undercutting competitors through

Anti-dumping refers to a trade practice where a country imposes measures to prevent foreign manufacturers from selling goods in its market at prices that are significantly lower than their normal value, often referred to as "dumping." The definition of dumping typically includes selling products at a price lower than the cost to produce them in the company's home market, which can harm domestic industries.

When a foreign company floods the market with products at lower prices, it is typically attempting to gain market share or eliminate competition, which can hurt local businesses that cannot compete with these artificially low prices. By opting for this strategy, the foreign producer seeks to gain a foothold in the market to eventually raise prices once domestic competition has been weakened or eliminated. Thus, addressing this issue is crucial for maintaining fair competition and protecting the economic interests of domestic producers.

The other options do not accurately capture the essence of anti-dumping. Reducing prices to increase sales refers to a legitimate competitive business strategy rather than an unfair trade practice. Charging extra duties on exported goods does not directly pertain to anti-dumping measures, which focus on imports sold at unfairly low prices. Lastly, restricting sales based on seasonal demand deals with inventory and sales management rather than trade practices aimed at undercutting competitors through