Trade Diversion versus Trade Creation in Joining a Trade Bloc: US Market for Imported Compact Cars
(Figure 2.2)

The market for motorbikes can be pictured using demand and supply curves. In this example, which may be a national market without trade, the market reaches equilibrium at a price of $2,000 per motorbike, with 40,000 motorbikes produced and purchased during the time period. We will now explore the concepts of consumer surplus and producer surplus.
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