Does the supply/demand diagram for both trade creation and trade diversion have 2 horizontal lines below equilibrium point? One line to represent with tariff and the other is without tariff?
@@EnhanceTuition they all use that. trade creation is a removal of inefficiencies as shown on the graph and trade diversion is when a member of an agreement's supply makes importing their products cheaper than more efficient non-members, so an extra supply line is drawn to show this middle "member supply"
Simple and precise. Thanks from India ❤️
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Finally i understood thank u
Does the supply/demand diagram for both trade creation and trade diversion have 2 horizontal lines below equilibrium point? One line to represent with tariff and the other is without tariff?
Why are you using the supply and demand diagram with a tariff to represent trade diversion and trade creation?
@@EnhanceTuition www.economicsonline.co.uk/Global_economics/Trade_creation.html
i think is because of this
@@EnhanceTuition they all use that. trade creation is a removal of inefficiencies as shown on the graph and trade diversion is when a member of an agreement's supply makes importing their products cheaper than more efficient non-members, so an extra supply line is drawn to show this middle "member supply"
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Amazing, thank you!
Thanks sir
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Best of luck Sunidhi!