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Cost Accounting: What is Dumping? 0 Views
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Description:
What is Dumping? Dumping is a way to increase profits for companies that trade internationally. Dumping describes when a company exports some product to a country and charges less than what the product typically costs in that country or in the company’s home country. The goal is to gain market share in that country by offering the lower price.
Transcript
- 00:00
And finance Allah Shmoop What is dumping up Oh well
- 00:08
yeah I guess it's like that And you might recognize
- 00:11
this excellent scene directed by Bob Zemeckis It won the
- 00:14
porcelain pony on Yeah if you never saw it or
- 00:17
need a refresher What is predatory pricing Well basically it's
Full Transcript
- 00:22
the act of selling of a product at a price
- 00:23
below production cost with the intent to bankrupt competitors so
- 00:28
that when they're gone while the Predator can swoop in
- 00:31
and charge whatever pricing they want while similar to predatory
- 00:35
pricing dumping is the export of product from one country
- 00:39
to another at a price below the price at which
- 00:42
it sells that product domestically Alright extreme Somalia finally gets
- 00:49
its act together as a country and instead of spending
- 00:52
efforts on pirating and assisted genocide they decide to make
- 00:55
cars and waited diversify their guys They're funded by pirates
- 00:59
Are us the most profitable bank on earth and they
- 01:03
make trucks You know the kind You always see terrorists
- 01:06
CNN shots of you know huge dance bumps and scratches
- 01:09
but the trucks keep running just fine like even on
- 01:12
three wheels So Somalia makes trucks just like this and
- 01:15
dumps them in the U S for ten grand each
- 01:18
Well after five years of this dump for GM and
- 01:20
Toyota the Big Three truck makers are all dead Nobody
- 01:24
wants to pay three times what the terrorist warlord model
- 01:28
costs in order to buy a truck that's American made
- 01:31
when those Big Three or gone Somalia then raises prices
- 01:35
above where they were AII instead of their truck selling
- 01:38
for ten grand they now sell him for forty grand
- 01:41
reaping huge rewards So you'd ask yourself Is this bad
- 01:45
Is this illegal Is this even sustainable Like what if
- 01:50
they do dump for five years and lose billions Won't
- 01:54
new competition come in and destroy the company Consumers will
- 01:58
then have benefited from the low five year dumping prices
- 02:01
So it's free trade Why not let it be free
- 02:04
Well good questions to noodle on you know while you're 00:02:07.35 --> [endTime] dumping
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