2. See page World View article on page 426. What made the prices of Chinese impo

Question

2. See page World View article on page 426. What made the prices of Chinese imported solar panels “unfair”? Answer: Who benefited from the “unfair” price? There are two answers. a. ______________________ b. _______________________ Who was harmed by the “unfair” price? ___________________________

Last year, China sold more than $2 billion worth of solar panels and equipment in the United States, about a third of all sales. Domestic producers say those sales were unfairly facilitated by Chinese government subsidies and deliberate "dumping." Chinese solar panels sell for about 70 cents per watt, compared with 83 cents per watt for panels produced in the United States. The market for panels in 2014 is expected to hit 6,000 megawatts. On friday, the Commerce Department sided with domestic producers, concluding that Chinas solar equipment was being sold at "unfairly low prices." To offset that unfair price advantage, the department imposed tariffs of 26 percent or more on imported Chinese panels. Several U. S. manufacturers said the move would prompt them to expand production capacity in the United States. Analysis: By raising the price of imported goods, tariffs reduce imports and protect import-compelling industries. But consumers lose.

Explanation / Answer

What made the prices of Chinese imported solar panels “unfair”?

Cost of production for panels produced in US was 13 cents or 18.5% higher than the selling price of chinese solar panels, this made them "unfair"

So, the chinese solar panel producers (33% market share) & the US consumers (lower price) were benefited from the unfair price

And the US panel manufacturers (lower market share & lower margins) were harmed by this unfair price.

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