Explanations:Dumping is a trade practice where a company exports a product at a price lower than the normal value of the product, often below the cost of production. This practice is typically used to gain a competitive advantage in the international market by undercutting local producers and gaining market share. The concept of dumping is important in international trade because it can lead to unfair competition and can be a subject of trade disputes between countries.
In the context of the question, the correct answer is Option C: "Higher price in Mumbai and lower price in London." This option correctly reflects the practice of dumping, where a product is sold at a lower price in the international market (London) compared to the domestic market (Mumbai). This price difference is often below the cost of production, which is a key characteristic of dumping.
It is important to understand that dumping is not simply about selling at a lower price in one market compared to another. The critical aspect of dumping is that the price in the international market is below the normal value or cost of production. This can be harmful to local producers in the importing country, who may not be able to compete with the artificially low prices.
Other options in the question do not correctly reflect the concept of dumping. For example, selling at a lower price in Mumbai and a higher price in Delhi (Option A) or Calcutta (Option D) does not constitute dumping because it involves price differences within the same country. Similarly, selling at a lower price in Mumbai and a higher price in London (Option B) does not necessarily indicate dumping unless the price in London is below the normal value or cost of production.
Understanding the concept of dumping is crucial for students preparing for competitive exams, as it is a significant topic in international trade and can be a source of trade disputes between countries. It is also important to be aware of the legal and economic implications of dumping, as it can lead to anti-dumping measures and trade sanctions.