Answer the question(s)below based upon the following diagram which depicts country A's market for its importable.

-Refer to the figure above.If A forms a customs union with C,the post agreement price will be

Question

Answer the question(s)below based upon the following diagram which depicts country A's market for its importable.
 
-Refer to the figure above.If A forms a customs union with C,the post agreement price will be

Quizplus · Accepted Answer

Before the formation of the customs union, country A imported its importable at the price of $20 from the world market. However, after forming the customs union with country C, the price of the importable will be reduced to $15 due to the elimination of tariffs and other trade barriers between the two countries. Therefore, the post agreement price will be $15. This is shown by the intersection of the world market supply curve and the demand curve after the formation of the customs union, which occurs at a quantity of 20 units and a price of $15. Thus, the best choice is B) $15.

Answer the Question(s)below Based Upon the Following Diagram Which Depicts