Question

Which statement indicates an unfair trade practice? Country X has trade agreements with many countries, including countries A, B, and C. Country X is a major exporter of iron, steel, and cheese. Its major imports include tuna, wheat, and electronic equipment. In 2011, Marlene Dairy Farm, one of the leading cheesemakers in country X, produced a record 70,000 tons of cheese. Marlene’s patented technology enabled it to produce cheese at the cost of $3 per ounce. But about 5% of the product was declared unfit for consumption. That rejected cheese had to be thrown away in keeping with state food waste management guidelines. The rest of the cheese was exported to three countries. Country X exported the cheese to country B at a price of $2 per ounce. Country C bought the cheese at $4 per ounce. Country X sold the cheese to country D for $4.5 per ounce. By 2013, Marlene’s was among the top five cheese exporters in the world.

Answer 1

Answer:

The answer is: Country X exported the cheese to country B at a price of $ 2 per ounce.

Explanation:

Unfair business practices are defined as any business practice or act that is misleading, fraudulent or that causes harm to a consumer. These practices may include acts that are considered illegal, such as those that violate a consumer protection law. Some examples of unfair trade methods are: the false representation of a good or service; fake gifts or prize offers; breach of manufacturing standards; False advertising; or misleading prices.

In this case, if country X sells the cheese to country B for $ 2, when its production is $ 3, it is making a misleading sale, because if it is true, country X is losing $ 1 per ounce with the sale, and if it is false it is a misleading price. As for the other two, which are sold at $ 4 in country C and $ 4.5 in D, it is understood from the point of view that something must be gained from its production if they want to make a profit, and that country D costs something more expensive, I would have explanation by not having trade agreements with that country.

The answer is: Country X exported the cheese to country B at a price of $ 2 per ounce.

Answer 2

Answer:

The Statement that indicates an unfair trade practice is: Country X exported the cheese to country B at a price of $2 per ounce

Explanation:

Country X exported produced the cheese for $3 per ounce and was able to export it to Country C and Country D for $4 and $4.5 respectively, making a healthy profit.

However, in order to gain market share in a new country and possibly to beat competition the cheese was sold at just $2 per ounce in Country B. This is an unfair trade practice, where you sell a product below it's production cost.