Disadvantages Of Dumping

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Dumping Question: What is meant by dumping? What are the different types of dumping? Why is dumping undertaken? What conditions are required to make dumping possible? Why does dumping usually lead to trade restrictions? Analyze one case study many government have used: Viet Nam for case of catfish or shrimp export, China with steel industry. I. What is meant by dumping? -Dumping is a kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a commodity at below cost or at least the sale of a commodity at a lower price aboard than domestically. - For example, if a television manufacturer in the U.S. sells televisions domestically for $500 dollars, but costing them only $300 dollars, and then sells…show more content…
- Forr example, when a producers, who happens to have unsold stocks (beacause of bad production planning or unforeseen changes in demand) and wants to get rid of them without spoiling the domestic market, sells them aboard at reduced prices. This is the type nearest to the concept of a sale below cost. III. Why is dumping undertaken? 1) To Find a Place in the Foreign Market. A monopolist resorts to dumping in order to find a place or to continue himself in the foreign market. Due to perfect competition in the foreign market he lowers the price of his commodity in comparison to the other competitors so that the demand for his commonly may increase. For this, he often sells his commodity by incurring loss in the foreign market. 2) To Sell Surplus Commodity. When there is excessive production of a monopolist’s commod­ity and he is not able to sell in the domestic market, he wants to sell the surplus at a very low price in the foreign market. But it happens occasionally. 3) Expansion of

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