Question

The protection against dumping argument for tariffs is criticized:

Multiple Choice

• because it is difficult to determine which industries merit protection.

• because direct subsidies are probably a better means of stimulating such industries.

• for all of these reasons.

• because there are too few documented cases to justify permanent tariffs.

Answer 1

Dumping means a kind of predatory pricing in the international trade.

It occur when manufacturer export a product to another country at price either below price charged in its home country market. In simple mean charging of lower price for a good in foreign market than charge for same Price of good in domestic market. So dumping can harm or dominate the domestic market.

Dumping is a type of unfair trade and prohibited in many Nation.

Tariff is used for prevent the dumping by increasing tariff rate. But it is not more capable technique to save all domestic industries.

Therefore tariff is criticized because it is difficult to determine which industries merit protection.

So option 1) is right.