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If a Foreign Supplier Sells a Good in Another Country

Question 11

Multiple Choice

If a foreign supplier sells a good in another country at a cheaper price than it sells the good in its home market, the


A) foreign supplier will gain a monopoly in the foreign market.
B) consumers in the receiving country will be harmed by the dumping of the good into its domestic market.
C) consumers in the receiving country can gain from buying the foreign-produced good if it is cheaper than the cost of producing the good domestically.
D) usual implications of the law of comparative advantage with trade restrictions do not hold in this case, particularly if the low-cost supplier is subsidized by a foreign government.

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