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Trade Creation 30. Trade Diversion: 70. Imports : 70 From US. Consumption Effect : 20. Domestic Price after Tariff. P =Z$ 80. Zambia price. P* = Z$60. World price United States. P =Z$ 40. 40. 70. 140. 160. CUSTOMS UNION WITH ZAMBIA. ZIMBABWE WATER MARKET. TARIFF OF - PowerPoint PPT Presentation
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Trade and welfare slide 1
Domestic Price after
TariffP =Z$ 80
Imports : 70From US S
D
Q
P
P* =Z$100
WATER MARKET
40 160
INTERNATIONAL TRADE BEGINS
14070
World price
United States
P =Z$ 40
Zambia price
P* = Z$60
Consumption Effect : 20
Trade Creation30
ZIMBABWE
WATER MARKET
CUSTOMS UNION
WITH
ZAMBIATARIFF OF
Z$ 40 IMPOSEDTrade Diversion:
70
