Suppose that Far North Canadian Lumber, Ltd., sells lumber in Canada at a price of $1,000 per 1,000 board feet and exports the same lumber to the United States at a price of $600 per 1,000 board feet. U.S. Lumber, Inc., produces and sells lumber for $700 per 1,000 board feet in the United States. Is Far North Canadian Lumber dumping lumber in the United States?
a. Yes; its price in Canada is greater than its price in the United States.
b. Yes; its price in Canada is greater than U.S. Lumber's price.
c. No; its price in the United States is less than U.S. Lumber's price.
d. No; it is maximizing its profits when it price discriminates between the United States and Canada.
Ans: a. Yes; its price in Canada is greater than its price in the United States.
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