Trade Diversion versus Trade Creation in Joining a Trade Bloc: UK Market for Imported Compact Cars
(Figure 12.2)

Before its entry, however, Britain did not have free trade in automobiles. It had a uniform tariff, imagined here to be £1,000, which marks up the cost of imported Japanese cars from £5,000 to £6,000. Press "Show initial price" to show the price paid by Britons. No Britons buy the identical German cars because they would cost £6,500 (equal to the £5,500 price charged by German producers plus the £1,000 tariff). The starting point for this discussion is the tariff-ridden point A, with the British government collecting £10 million (£1,000 x 10,000 = £10 million) in tariff revenues. Press "Show point A" to show the point on the graph. Government tariff revenue is represented on the graph as area a + c. Press "Show government tariff revenue" to show this area on the graph.
Press "Continue" when you are ready to move on. The "Reset" button will clear the graph.