What is predatory dumping? How likely is dumping to be predatory? Discuss.
What will be an ideal response?
POSSIBLE RESPONSE: Predatory dumping occurs when a foreign firm temporarily charges a low price with the intention to drive local firms out of business, and eventually attain monopoly power and raise prices. Predatory dumping is likely to be rare in modern markets. An exporting company will engage in predatory dumping only if the profits in the distant future outweigh the current losses associated with the temporary reduction in price. However, future profits are likely to be quite uncertain. Even if the firm succeeds in driving current competitors out of business, once prices are raised, new firms will enter the industry as competitors, and prices will not continue to be high for very long.
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The current flows of goods, services, investment income, and unilateral transfers between a country and the rest of the world is called the:
A) current account. B) financial account. C) national income product account. D) none of the above.
If each person purchases an item, and then they only use it a small percentage of the time, this is an example of a(n) ________ model.
If both the demand and supply curves for computers shift to the right, the price of computers may rise, fall, or remain unchanged
a. True b. False
Which of the following would cause the demand for plumbers to decrease?
a. an increase in the productivity of plumbers b. a decline in the construction of housing c. a law that mandated higher wages for plumbers d. an increase in the number of plumbers who belong to a union