A French firm manufactures cheese for $5 per pound. They sell it in France for $7 a pour $5 per pound. An Indian firm produces cars for $7,000 each and sells them in the United States for $6,C A Chinese fish farm can produce Tilapia at $1 per pound, while U..S fish farms produce Imports of Chinese Tilapia are sold in the United States for $3 per pound, undercutting d A U.S. firm buys $100,000 shares in a Japanese electronics company and sells them for $ Why might a firm engage in dumping? The firm is trying to improve relations with a foreign country government. The firm is reacting to market forces that have driven the price level to below production
A French firm manufactures cheese for $5 per pound. They sell it in France for $7 a pour $5 per pound. An Indian firm produces cars for $7,000 each and sells them in the United States for $6,C A Chinese fish farm can produce Tilapia at $1 per pound, while U..S fish farms produce Imports of Chinese Tilapia are sold in the United States for $3 per pound, undercutting d A U.S. firm buys $100,000 shares in a Japanese electronics company and sells them for $ Why might a firm engage in dumping? The firm is trying to improve relations with a foreign country government. The firm is reacting to market forces that have driven the price level to below production
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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Transcribed Image Text:Which of these scenarios describe circumstances of trade dumping? Note that all values are in United States (U.S.) dollars
for ease of comparison and that there are no transportation costs.
A French firm manufactures cheese for $5 per pound. They sell it in France for $7 a pound, but in the United States for
$5 per pound.
An Indian firm produces cars for $7,000 each and sells them in the United States for $6,000.
A Chinese fish farm can produce Tilapia at $1 per pound, while U..S fish farms produce the fish at $4 per pound.
Imports of Chinese Tilapia are sold in the United States for $3 per pound, undercutting domestic producers.
A U.S. firm buys $100,000 shares in a Japanese electronics company and sells them for $80,000 two weeks later.
Why might a firm engage in dumping?
The firm is trying to improve relations with a foreign country government.
The firm is reacting to market forces that have driven the price level to below production costs.
The firm is trying to be an equal competitor in another country.
The firm is trying to undercut foreign competitors in order to drive them out of the market in the long term.
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