If Foreign Companies Try to Gain Market Share in the United

question 113

Multiple Choice

If foreign companies try to gain market share in the United States by selling goods below what it costs to make them,the U.S.government can fine the companies and distribute the collected fines to affected U.S.companies.This foreign company's practice is known as:

• A) countertrade.
• B) reciprocal pricing.
• C) quota dodging.
• D) dumping.
• E) non-reciprocity.

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Definitions:

Two-part Tariff

A pricing strategy where the price of a product or service is composed of two parts: a fixed fee plus a variable charge based on usage or consumption.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.

Reservation Prices

The maximum price a consumer is willing to pay for a good or service, beyond which they will not purchase it.

Mixed Bundling

Selling two or more goods both as a package and individually.