Question

Following natural disasters such as hurricanes and tornadoes, the demand for building products such as drywall or gypsum panels and lumber increases. Sometimes, these events lead to higher prices for building products as demand exceeds supply. However, due to global exporting, the prices might decline. U.S. gypsum manufacturing companies complained that China-based Knauf Tianjin was _____ products and selling panels for lower prices than they charged in China.

a. dumping
b. loading
c. piling
d. bartering

Answer 1

The correct answer is a. dumping. Dumping refers to selling goods below their cost of production. Anti-dumping laws impose tariffs to increase the price of these imports.

The correct answer is a. dumping.

Dumping refers to selling goods below their cost of production and is not allowed under World Trade Organization (WTO) rules. Anti-dumping laws impose tariffs on imports sold below their cost of production to reflect their actual cost. In the given scenario, U.S. gypsum manufacturing companies complain that China-based Knauf Tianjin is dumping products and selling panels for lower prices than they charge in China.