Which of the following is a consequence of dumping?

Dumping occurs when a company exports a product at a price lower than the price it normally charges in its own country or below its cost of production. A primary consequence of this practice is the disruption of local markets. When foreign products are sold at artificially low prices, they can undercut domestic producers, making it difficult for them to compete. This can lead to local businesses suffering significant losses, potentially resulting in bankruptcies and job losses.

As local firms are unable to sustain their operations, the market dynamics change dramatically. Consumers may initially benefit from lower prices, but this situation can create a monopolistic environment in the long run, as local competition is eradicated. Ultimately, the local market may become heavily dependent on foreign suppliers, which is detrimental to the economic stability and growth of the local economy.

The other choices, while they touch on various aspects of market dynamics, do not capture the immediate impact of dumping as effectively. Increased domestic prices generally occur after local producers have been driven out, and while there may be some positive impact as an initial consumer benefit, this is short-lived. Encouraging competition among local firms is the opposite of what happens in the case of dumping; instead of fostering competition, it reduces it by eliminating local participants from the industry.