The reason for dumping is that the demand curve for ABC Co's computers is _______ because ________ are available from other nations?
Correct answer: A. more elastic in Japan, more substitutes are available from other nations
- A. more elastic in Japan, more substitutes are available from other nations
- B. more elastic in Japan, fewer substitutes are available from other; nations
- C. more inelastic in Japan; more substitutes are available from other; nations
- D. more inelastic in Japan; fewer substitutes are available from other nations
Explanation
Dumping is encouraged when demand is more elastic in the foreign market, because buyers there can switch readily among substitutes supplied by other countries. This makes a lower export price effective in increasing sales.
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