Final answer:
A foreign business selling low-priced licensed products in the origin country of the license may engage in dumping, with implications for local economies, competition, and job markets. This process ties into the broader context of global assembly lines and international business strategies. However, restricting such trade could be detrimental, similar to how stifling technological innovation would be counterproductive.
Step-by-step explanation:
A foreign business that legally obtains a license to produce products and then sells those items for low prices in the country where the license originated could be engaged in multiple international business strategies. One such strategy is licensing, where a company acquires the rights to produce and sell products under a brand's name in a foreign market. However, when these products are sold at low prices to businesses in the country of license origin, this could potentially be an example of dumping. Dumping involves selling a product in a foreign market at a price below its cost of production to gain market share or eliminate competition. Over time, this may lead to predatory pricing, where the foreign firm raises prices after having driven out domestic competition.
Another relevant concept is the global assembly line, which refers to the international production process where components are manufactured in different countries, and products are assembled and supported across national borders. The strategic use of global assembly lines aims to take advantage of cost efficiencies and technical expertise available in various countries.
It's important to note that such activities are a part of international business strategy and can have vast implications for local economies. For instance, such strategies might lead to job losses within the importing country or might disrupt its industrial structure. Nonetheless, foreign trade as a type of innovative technology can stimulate competition and push domestic firms toward greater efficiency and innovation. The concept of foreign trade as innovation suggests that attempts to restrict trade might be counterproductive in the long term.