BUSINESS ADMINISTRATION
STRATEGIC MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Selling at low prices in foreign competitor’s markets for the pursose of take over foreign markets
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A strategy to attack profit sanctuaries of foreign competitors
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A policy adopted by governments to regulate prices of imported goods
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A complex networks of laws about working conditions
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Detailed explanation-1: -Dumping occurs when a country or company exports a product at a price that is lower in the foreign importing market than the price in the exporter’s domestic market. The biggest advantage of dumping is the ability to flood a market with product prices that are often considered unfair.
Detailed explanation-2: -What is dumping? Dumping is when foreign firms dump products at artificially low prices in the European market. This could be because countries unfairly subsidise products or companies have overproduced and are now selling the products at reduced prices in other markets.
Detailed explanation-3: -Often, dumping is mistaken and simplified to mean cheap or low priced imports. However, it is a misunderstanding of the term. On the other hand, dumping, in its legal sense, means export of goods by a country to another country at a price lower than its normal value.
Detailed explanation-4: -Dumping enables consumers in the importing country to obtain access to goods at an affordable price. However, it can also destroy the local market of the importing country, which can result in layoffs and the closure of businesses. The WTO and EU regulate dumping by putting tariffs and taxes on trading partners.
Detailed explanation-5: -Answer and Explanation: The correct answer is d) Foreign producers selling below cost to drive domestic firms bankrupt must be stopped.