Question

When companies sell below cost in other countries, and domestic industry is injured, it is referred to as______

Answer 1

Dumping occurs when firms sell products below cost in foreign markets, hurting domestic industry, often as part of a predatory pricing strategy to later raise prices after eliminating competition.

Step-by-step explanation:

When companies sell products below cost in other countries, causing harm to domestic industry, this practice is referred to as dumping. Dumping can be part of a long-term strategy, known as predatory pricing, in which foreign firms set low prices to drive out domestic competition. After eliminating their competitors, these firms can then increase prices to monopoly levels, to recoup losses and secure long-term profits.