Dumping Goods Is Profitable Whenever

question 1

Multiple Choice

Dumping goods is profitable whenever:

• A)the firm does not get caught.
• B)the firm can hire illegal workers to process the production.
• C)the foreign market price (after transportation costs) is higher than marginal cost but lower than the home price.
• D)the foreign firm eventually closes because it cannot compete.

---

Definitions:

Intrinsic Value

The actual, fundamental value of an asset, determined through analysis without reference to its market value.

Warrant

A security that gives the holder the right to purchase shares of stock at a fixed price over a given period of time.

Option Agreement

A contract that grants the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date.

Warrant

A financial instrument that gives the holder the right, but not the obligation, to buy shares of a company at a specific price before a certain date.