dumping price finds its application in the world market competition instead of trade restrictions.This economic concept is one of the most striking manifestations of competition in this field.This practice is widely used in the 30s of the 20th century.This was the period of the serious crisis in the economy and problems with sales peaking in the world market competition.
definition
dumping prices - is the sale of any goods abroad at a cost that is lower than its normal figure.The above economic situation can cause substantial material damage to that industry, which was established in the territory of the importing country.
Said "regular price" is the value of a commodity analog at which it is sold in the state, which produces, in the normal course of trade.
for goods-analogue is meant a product type that has characteristics similar to those under consideration instances.
Calculation ordinary or normal price
In the absence of the intrinsic value of the goods regular price is determined by the high cost of its analog, intended for export to another country.Also, this indicator can be calculated as the sum of production costs with the addition of a reasonable amount of costs to sell.Thus, the dumping calculation uses normal price index, taking into account its natural and acquired competitive advantages of exporters of this type of product.Such benefits are expressed in energy costs, the distribution of production, the availability of independent sources of raw materials and advanced technologies.
Knowingly known material damage
dumping price is always accompanied by the material damage, which is a proof of the adverse economic consequences of the import of goods at an unfavorable price.These negative factors occur in those sectors finished products that compete with goods imported under these prices.
Application Areas dumping
dumping price may be used by:
- commercial sector resources;
- government subsidies provided to exporters.
Commercial practice of economic activity involves the use of these types of dumping:
- permanent export at a price lower than the normal;
- random - temporary episodic sale of goods on the international market at a low cost because of the large accumulation of stocks of goods exporters;
- reverse, provides for the sale of goods on the domestic market of the State at a cost lower than the export (such dumping prices used in significant fluctuations in exchange rates).
price dumping in public procurement is not only an intentional reduction in the cost of sale of goods, but it's also some discrimination in this area in which there is a substantial understatement of one market and simultaneously selling a high counterparts on the other.Thus, the use of dumping related to the monopolization of the market and the use of unreasonably high prices.
Economic prerequisites for dumping
formal economic preconditions for the implementation in practice of dumping - the differences in the price elasticity of demand for a particular type of goods to foreign and domestic markets.So, if not this indicator domestic market corresponding coefficient of the foreign market is fluctuation in the upward and downward price to a lesser extent in the domestic market.Therefore, in this case the expansion of overseas sales more than its domestic reduction.
Dumping allows to provide in the first place prize of exporting firms, which has an opportunity to increase its share in the international market.This compensated for the costs that are associated with price competition in the domestic market.Thus, the total sales volume of built up, and the firm can generate more revenue.
To summarize this article, it should be noted - the determination that dumping is the price indicated by the - at the time quite successful use exporters can obtain significant revenue.
