International Business Law and Its Environment 9th Edition by Richard Schaffer,Filiberto Agusti,Lucien Dhooge

Exercise 2

A foreign shoe manufacturer sells shoes to a wholly-owned subsidiary company in a foreign market at $20. The subsidiary sells to an independent distributor at $40, who sells to a retailer at $80.00. The retailer sells the shoes to a consumer for a price of $160. In comparing the export price to the normal value, which price should the ITA use, and why? Which allowances or adjustments to the export price, if any, can the ITA make? Give several examples.