Question

What are some “normal” economic circumstances that might lead to selling at an unusually low price, that are not really “dumping”? Mention two and explain each.

Answer 1

Answer)

1. Economic slowdown/ Recession- Let us consider an example,you have bought a property hoping for its price to go up in future,however country started experiencing slowdown and unemployment which means there would be lesser and lesser buyers in future leading to huge value reduction in price of property, so to save your investment from absolute disaster you sell it at lower price,this is very common condition which almost every nation goes through over a certain cycle.
2. Imperfect information- There are times when you don't have enough or correct information, consider same example of property, you bought a property thinking a mall would be built around it which will shoot its prices,however your information was wrong as instead of mall govt decided to conserve land ,now this misinformation means price of your property will go down,so to save yourself from heavy damage you sell it off at lower price,this again is a very common phenomena where imperfect information can lead to losses.

Answer is complete.Thank you!