When a firms "dumps" some of its output in another country,it
A)creates an environmental hazard in the receiving country.
B)sells its output abroad at a price lower than it costs to produce the output.
C)increases the total level of employment in the importing country.
D)is specializing according to comparative advantage.
E)creates for itself an absolute advantage.

Question

Quizplus · Accepted Answer

Dumping refers to the practice of selling goods abroad at a price lower than the cost of production, which can harm domestic industries in the receiving country by making it difficult for them to compete. It is often done to expand market share and drive competitors out of business. Dumping does not necessarily create an environmental hazard or increase total employment in the importing country. It is not an example of specialization according to comparative advantage or absolute advantage.

When a Firms "Dumps" Some of Its Output in Another