《ch06-Nontariff Trade Barriers》.ppt

/stock/s033311937748.shtml /native/city/201204/509513248.shtml /news/detail/v0-d1026237063.html Export Subsidy P Q Du.s Sj0 100 1 E Sj1 75 F 1.5 125 Foreign consumers are favored over domestic consumers to the extent that the foreign price of a subsidized export is less than the product’s domestic price. The foreign demand for exports be relatively elastic, so that a given percentage drop in foreign price is more than offset by the rise in export volume, the home nation’s export revenues will increase. 6.7 Dumping Dumping is recognized as a form of international price discrimination. It occurs when foreign buyers are charged lower prices than domestic buyers for an identical product, after allowing for transportation costs and tariff duties. A price lower than production cost Dumping The export of a commodity at below cost, or the sale of a commodity at a lower price abroad than domestically. Three types of dumping: Persistent dumping is the continuous tendency of a domestic monopolist to maximize total profits by selling the commodity at a higher price in the domestic market. Dumping The export of a commodity at below cost, or the sale of a commodity at a lower price abroad than domestically. Three types of dumping: Persistent dumping Predatory dumping is the temporary sale of a commodity at below cost or a lower price abroad to drive foreign producers out of business. Dumping The export of a commodity at below cost, or the sale of a commodity at a lower price abroad than domestically. Three types of dumping: Persistent dumping Predatory dumping Sporadic dumping is the occasional sale of a commodity at below cost or lower price abroad to unload surplus of the commodity without reducing domestic prices. International Price Discrimination A profit-maximizing firm would benefit from international price discrimination, charging a higher price at home, where competition is weak and demand is less elastic, and a lower price for the same pr