Why Would Foreign Firms Export a Product at Less Than

Why would foreign firms export a product at less than its cost of production-which
Presumably means making a loss?

A) Many nations participate in poor planning and as a result produce a surplus of product which they sell at a loss.
B) This may be part of a long-term strategy in which foreign firms would sell at below the cost of production in the short-term for a time, and when they have driven out the domestic U.S. competition, they would then raise prices.
C) Many nations simply wish to keep their workers employed, no matter what the cost.
D) Many nations simply produce and sell inferior goods at prices that reflect this fact.

Correct Answer:

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