商务英语综合教程下册课件房玉靖主编 ISBN9787810789707Unit 16 Economy Theory and Dumping.pptVIP

Unit Sixteen Introduction Dumping is totally at odds with the traditional free-trade philosophy. However, this philosophy was based on a world whose thinking was in terms of production and trace under conditions of perfect competition. Text 1 Dumping is totally at odds with the traditional free-trade philosophy. However, this philosophy was based on a world whose thinking was in terms of production and trade under conditions of perfect competition. In practice, however, this condition is by no means always satisfied. This means that the question that becomes relevant to entrepreneurs is the target price-volume combination for each individual’s sales area and how they believe they can best cope with the competition (Brander and Krugman, 1983). For example, in a situation of imperfect competition a company may engage in price-fixing with an eye to its profits. If the various markets are separate from one another, the supplier will set prices that markets will bear. If elasticity of demand differs, pricing resulting from the equation of marginal revenue and marginal cost will vary according to differing demand elasticties. If, for example, the demand facing a company on the domestic market is fairly inelastic but fairly elastic on the international market, the endeavor to maximize profits will induce a company to charge a higher price at home than for exports of the same products. This is a typical example not just for price discrimination but of dumping as well. creates a fertile breeding ground for price discrimination and dumping in the absence of perfect competition on separate sub-markets (Nicolaides, 1990). It is also conceivable that companies in certain countries will feel obliged at times of economic decline to maintain employment as far as possible and thus make feverish efforts to keep international sales up to the level before decline. 6 In this situation, the exporter’s market share does not drop, but there is a d