Final answer:
Argonia exporting cheap toys to Cadmia below production costs constitutes dumping, which is part of a strategy known as predatory pricing and is combated by anti-dumping laws. so, option B is the correct answer
Step-by-step explanation:
If Argonia exports vast quantities of cheap toys to Cadmia, selling them at below their costs of production, it would constitute dumping. This practice is often seen as part of a long-term strategy called predatory pricing, where foreign firms sell goods at prices below the cost of production to drive out domestic competition. Once that is achieved, they may raise prices. Anti-dumping laws, which are enforced by global institutions like the World Trade Organization (WTO), exist to prevent this behavior by imposing tariffs that bring the price of these imports back to reflect their real cost of production.
Dumping refers to selling goods below their cost of production. In this scenario, if Argonia exports vast quantities of cheap toys to Cadmia, selling them below their costs of production, it would constitute dumping. Dumping is when foreign firms sell goods at prices below the cost of production for a short period of time, usually as a predatory strategy to drive out domestic competition.