What is dumping?

What is dumping?

• A. When products are dumped in landfills.
• B. When a domestic firm sells abroad at a loss to gain market share.
• C. When a government subsidizes exports to distort trade.
• D. When a foreign company sells its product for less than the cost of production.

Answer: (D)

Dumping happens when a foreign exporter sells a product in another country at a price below the cost of producing it. This pricing aims to win market share quickly or push local competitors out, and it’s a targeted, often controversial trade tactic because it undercuts competition. The other statements describe different ideas—discarding waste in landfills, government subsidies to exports, or simply selling at a loss without tying that loss to production cost—so they don’t define dumping as precisely as price below production cost does.

Dumping happens when a foreign exporter sells a product in another country at a price below the cost of producing it. This pricing aims to win market share quickly or push local competitors out, and it’s a targeted, often controversial trade tactic because it undercuts competition. The other statements describe different ideas—discarding waste in landfills, government subsidies to exports, or simply selling at a loss without tying that loss to production cost—so they don’t define dumping as precisely as price below production cost does.