|
| |
Dumping is the practice of selling a product or service in a foreign market lower than an established "normal price." This is typically done to establish a monopoly or put a competitive threat out of business.
Normal PriceA normal price can refer to a typical "fair value" in a nation over a period of time. The prices charged by a firm in their domestic market and other international markets are also considerations. Government SupportDumping isn't necessarily barred by trade agreements but it is viewed negatively. In many cases, a government or trade organization will take action against dumping if it is damaging the industry of a nation. Dumping is particularly damaging if it is supported by a government with payments such as subsidies.
ExampleA firm sells widgets for $2 in their own market and $1.80 in most international markets. Their strongest competition is in Germany where they sell the widgets for $0.30. It is likely this price is aimed at damaging competitors in Germany as opposed to being viewed as a fair value for the product.|
| Type | | | Definition | The practice of selling a product or service in a foreign market lower than an established "normal price." | | Related Concepts | |
Pricing
This is the complete list of articles we have written about pricing.
If you enjoyed this page, please consider bookmarking Simplicable.
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.
|
