To maintain that South Koreans are dumping their DVDs in the United States is to maintain that:

 Options:

a. Koreans are selling DVDs in the U.S. below their production cost b. Koreans are selling DVDs in the U.S. above their production cost c. the cost of manufacturing DVDs in Korea is lower in Korea than in the U.S. since wages are lower in Korea d. the cost of manufacturing DVDs in Korea is higher in Korea than in the U.S. since wages are higher in Korea

The Correct Answer Is:

a. Koreans are selling DVDs in the U.S. below their production cost

Correct Answer Explanation:

If it’s claimed that South Koreans are dumping their DVDs in the United States, it suggests that they’re selling these DVDs in the U.S. below their production cost. This assertion aligns with option a. Let’s dive into why this answer is correct and why the other options don’t hold.

Option A: Koreans are selling DVDs in the U.S. below their production cost

When someone says South Koreans are dumping DVDs in the U.S., it implies they are selling the DVDs at a price below what it costs to produce them. Dumping occurs when products are sold in a foreign market at a lower price than what they’re sold for in their domestic market or lower than the production cost.

This practice often leads to market disruption and unfair competition, as local businesses may struggle to compete with such low prices. If the cost of production in South Korea is higher than the selling price in the U.S., it suggests that these DVDs are being sold at a loss, indicating dumping.

Why Other Options Are Incorrect:

Option B: Koreans are selling DVDs in the U.S. above their production cost

If South Koreans were indeed selling DVDs in the U.S. above their production cost, it wouldn’t constitute dumping. Dumping specifically refers to the practice of selling goods at prices below their production cost or below what they are sold for in the domestic market.

Selling above production cost might still raise questions about pricing strategies, competition, or market positioning, but it doesn’t align with the concept of dumping.

Option C: The cost of manufacturing DVDs in Korea is lower in Korea than in the U.S. since wages are lower in Korea

This option introduces the concept of lower manufacturing costs in Korea due to lower wages. While this could be a factor in understanding cost differentials between countries, it doesn’t directly address the notion of dumping.

Even if production costs are lower in Korea due to lower wages, if the DVDs are being sold in the U.S. below that production cost, it implies that dumping is occurring, irrespective of the cost advantages in the production process.

Option D: The cost of manufacturing DVDs in Korea is higher in Korea than in the U.S. since wages are higher in Korea

This option suggests that the higher manufacturing cost in Korea, potentially due to higher wages, might influence their strategy to sell DVDs at a lower price in the U.S.

However, this doesn’t align directly with the definition of dumping, which focuses on selling goods below their production cost or below the price at which they’re sold in the domestic market. Higher manufacturing costs in Korea compared to the U.S. might prompt businesses to adopt different strategies, but it doesn’t inherently define the act of dumping.

Ultimately, the concept of dumping revolves around the discrepancy between the selling price and the production cost or the price in the domestic market.

Options B, C, and D touch upon various aspects related to production costs and market dynamics, but they don’t directly address the key criterion of dumping, which is the selling of goods below their production cost or their domestic market price.

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