After the formation of BERPHO,a free trade area for its member countries,Nuntica found that its high-cost domestic producers were replaced by low-cost producers within the free trade area.This is an example of
A)value creation.
B)strategic pricing.
C)trade creation.
D)trade diversion.
E)economic exposure.

Question

Quizplus · Accepted Answer

Trade creation occurs when the formation of a free trade area leads to the replacement of high-cost domestic production with lower-cost imports from member countries, resulting in more efficient resource allocation and increased trade among the member countries.

After the Formation of BERPHO,a Free Trade Area for Its