What is the act of selling goods in a foreign market at a price lower than their market value called?

The act of selling goods in a foreign market at a price lower than their market value is known as dumping. This practice typically occurs when a company exports a product at a price lower than the price it charges in its domestic market, or even below the cost of production. The intent behind dumping is often to gain market share in the foreign market by undercutting competitors.

By setting the price artificially low, companies may attempt to eliminate competition or establish a foothold in a new market. However, dumping can lead to retaliation by affected countries through anti-dumping duties or tariffs to protect their local industries from unfair competition. Consequently, the concept of dumping is significant in international trade discussions and policy formulation, as it impacts trade relations and market dynamics.

Understanding this concept is crucial in the field of economics, particularly in discussions about international trade regulations and the behavior of firms in global markets.