KAL draws Dumping Words rather than actions

The video explains how firms aim to make money but may use dumping, selling goods below production cost, to undercut competitors. This strategy is often used by larger firms to weaken smaller rivals. Countries may retaliate against foreign dumping with measures like quotas and duties, potentially leading to trade tensions. The World Trade Organization often mediates such disputes. While genuine dumping is rare, accusations are common.

What is the primary goal of a firm engaging in dumping?

• To undercut competitors

• To enhance product quality

• To improve employee satisfaction

• To increase production costs

Why might larger companies engage in dumping?

• They aim to reduce product quality

• They can sustain short-term losses

• They have higher production costs

• They want to increase market prices

How do countries typically respond to foreign firms dumping cheap goods in their markets?

• By encouraging local production

• By reducing import taxes

• By implementing anti-dumping measures

• By increasing subsidies

What role does the World Trade Organization play in the context of dumping?

• It imposes tariffs on dumped goods

• It resolves trade disputes

• It provides subsidies to affected firms

• It sets production standards

What is more common in practice, genuine dumping or accusations of dumping?

• Genuine dumping

• Both are equally common

• Neither is common

• Accusations of dumping