97.0k views
5 votes
What does asserting that South Koreans are dumping VCRs in the United States imply?

a) Denial of trade practices
b) Accusation of unfair competition
c) Approval of market strategies
d) Indifference to international commerce

User Way
by
7.1k points

1 Answer

4 votes

Final answer:

Asserting that South Koreans are dumping VCRs in the United States implies an accusation of unfair competition, related to the practice of selling products at below production costs to undercut local markets, a strategy that can be associated with predatory pricing.

Step-by-step explanation:

Asserting that South Koreans are dumping VCRs in the United States implies an accusation of unfair competition. This concept of 'dumping' refers to the practice where companies sell products in a foreign market at a price below their cost of production or less than fair value, usually with the aim to undermine and outcompete local businesses. Once the competition is weakened or eliminated, prices may be raised. This is sometimes linked to the idea of predatory pricing, as discussed in the context of monopoly economics.

When a dumping complaint is taken up by the Commerce Department, followed by the imposition of a tax such as a dumping margin by trade authorities, this falls under anti-dumping measures. These measures are designed to protect domestic industries and are a contentious issue in terms of their strategic and economic implications. In the provided case where the U.S. International Trade Commission imposed a high dumping margin after determining Japanese firms were dumping flat-panel displays, it represents an effort to enforce trade protection.

User CarrKnight
by
7.7k points