Author Question: With regard to price controls, the term dumping refers to: a. undermining competition c. discarding ... (Read 106 times)

xclash · **on:** Jun 29, 2018

With regard to price controls, the term dumping refers to:
a. undermining competition c. discarding of excess inventory
b. selling products below fair value d. all of the above

Question 2

A firm is vulnerable to competition from parallel imports if it
a. Engages in differential pricing.
b. Distributes through unauthorized channels.
c. a and b.
d. None of the above.

Zebsrer · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

D
Dumping refers to selling below fair value to undermine competitors' charging the market price and/or to get rid of excess inventorywith the same outcome, of undermining competition. When used as price controls, antidumping measures involve initiating investigations to determine whether imports are sold below fair value, imposing duties to offset dumping, as well as adopting other measures to counter the effects of dumping.

Answer to Question 2

A
A firm engaging in a differential pricing strategy could be vulnerable to competition from unauthorized channels. In fact, differential pricing by the manufacturer has been identified as a main cause of parallel importing.