Dumping is selling goods in a foreign market at a price

Step 1: Analyze the question The question asks for the definition of dumping in international trade.

Step 2: Explain the concept Dumping is the practice of selling goods in a foreign market at a price lower than the price charged for the same goods in the producer's home market. It can also mean selling below the cost of production. Its usual meaning in exams, though, is the home-versus-foreign price comparison.

Why do firms or countries do it?

• To get rid of surplus goods
• To capture or gain a share of a foreign market
• To eliminate foreign competitors, after which they can raise prices
• To take advantage of economies of scale

Step 3: Check each option

• A. Below what is sold at the home market. This matches the definition of dumping.
• B. Above the home price. This is the opposite of dumping.
• C. Equal to the home price. This is ordinary trade with no price discrimination, so it is not dumping.
• D. Equal to the cost of producing the goods. This is not the standard definition. Dumping is usually below cost or below the home price, not simply at cost.

Step 4: Answer The correct option is A.

Exam tip: Think "dump = throw away cheaply." Dumping means a lower price abroad than at home. Countries often respond with anti-dumping duties or tariffs, which is a common follow-up question.