Question

1.Why might the foreign exporter be cutting prices to U.S. customers?

2. What information do you think you need before committing to a purchase? Specifically, what pricing information do you need?

3. If it turns out the products are being “dumped” in the U.S. market, what would be the result and how might it affect your firm and your purchasing decision?

4.Do you think it is fair or unfair for an exporter to dump its goods in a foreign market?

5.Evaluate the statement, “Selling at a low price can’t be unfair.”

Answer 1

1. The foreign trade deficit of US is $ 450 billion which is 2.6% of total export of the country. This means that the people of the US having more purchase power parity. This trade deficiet is more which results in the higher imports of goods to the country. This also means that people are able to buy more products than any other country. Hence the foreign exporters gives more subsidiary to the products as their products are sold more in number.

2. Purchasing decision are highly made on the basis of need, wants, desire and finance.

Before committing to purchase the pricing information which we need are as follows:

1. Price of the product which we are going to buy.

2. Price of the same product with discounts at various stores either online or offline.

2. The price offered by various companies of same specifications in range.

3. Various in little either in price or product quality.

4. Feedbacks and reviews of the product.

3. Dumping is the process of selling the product at lower price in the foreign country market.

This result in US market as

1. Monopolies the market.

2. Gain the unfair share of market.

3. The revenue generated by other product of same type would be reduced.

4. The growth would be reduced.

5. Exploit the competition.

It effects the firm as it would reduces the revenue of the firm's of those who are the major players in that area.