______________ occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area.
A) Trade alteration
B) Trade qualification
C) Trade diversion
D) Trade creation
E) Trade diversification

Question

Quizplus · Accepted Answer

Trade creation occurs when high-cost domestic producers are replaced by low-cost producers within the free trade area, leading to more efficient production and increased trade.

______________ Occurs When High-Cost Domestic Producers Are Replaced by Low-Cost