Question

Dumping is

• A. selling of goods abroad at a price well below the production cost at the home market price
• B. the process by which the supply of a manufacture's product remains low in the domestic market, which batches him better price
• C. prohibited by regulations of GATT
• D. All of the above

Hint:

Dumping is an unfair trade practice that can lead to trade disputes and is addressed in international trade agreements.

Answer 1

The Correct Option is A

Step 1: Understanding the term "dumping."
Dumping is the practice of selling goods in a foreign market at prices lower than in the domestic market, often below the production cost. This is done to gain a competitive edge.
Step 2: Analyzing the options.
(A) selling of goods abroad at a price well below the production cost at the home market price: Correct — This defines dumping accurately.
(B) the process by which the supply of a manufacture's product remains low in the domestic market, which batches him better price: This is not a correct definition of dumping.
(C) prohibited by regulations of GATT: While dumping can be challenged under GATT regulations, the primary definition of dumping is as given in (A).
(D) All of the above: This is incorrect because option (B) is not a correct definition of dumping.
Step 3: Conclusion.
The correct answer is (A) selling of goods abroad at a price well below the production cost at the home market price, as this correctly defines dumping.

Answer 2

Dumping is a term from international trade economics, so the best way to verify the right option is to check each one against the standard economic definition of the practice, rather than just restating it.

1. Selling of goods abroad at a price well below the production cost at the home market price: This matches the accepted economic definition of dumping - a firm exports a product at a price lower than what it charges domestically (or below its cost of production), typically to gain market share abroad or dispose of surplus output. This is the textbook definition.
2. The process by which the supply of a manufacturer's product remains low in the domestic market, which fetches him a better price: This describes something closer to supply restriction or artificial scarcity in the home market, a different economic phenomenon, and is not how dumping is defined.
3. Prohibited by regulations of GATT: GATT (and now the WTO) does not outright prohibit dumping as an act; instead, it permits importing countries to impose anti-dumping duties as a countermeasure when dumping causes material injury to domestic industry. So this describes a regulatory response to dumping, not its definition.
4. All of the above: Since option (B) does not correctly describe dumping and option (C) mischaracterizes the GATT position, this combined option cannot be correct.

Only the direct pricing-based definition survives this check.

Therefore, the correct answer is selling of goods abroad at a price well below the production cost at the home market price.