Dumping Occurs When

question 19

Multiple Choice

Dumping occurs when

• A)prices for products are lowered to the point at which revenue just covers costs.
• B)a product is exported to a foreign country because demand for the product domestically has waned.
• C)an abundance of inventory is sold off to discount retailers to recoup costs.
• D)a company charges less for a product than what customers are willing to pay.
• E)a company sells its exports to another country at a lower price than it sells the same product in its domestic market.

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Definitions:

Firm's Capacity

The maximum output or the total amount of goods or services that a company can produce under normal working conditions.

Full Capacity Level

The maximum level of production a company can achieve using its current resources and technology without degrading quality or efficiency.

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without increasing its financial leverage or equity financing.

Profit Margin

A financial metric used to assess a company's profitability by comparing net income to total revenue.