Note 7 — Chapter IX
Reading edition
The goods exported to foreign countries may show a profit if they are sold at a price less than the average cost of production but greater than the marginal cost. If it costs $100 a unit to produce a million units of a given product for the home market and only $70 a unit to produce an additional 100,000 units then there is a profit in permanently selling this extra amount at any price above $70. To break down a foreign competition it may pay temporarily to sell at 60 or even 30 dollars, in order to raise prices again after competition is destroyed.