(Solved): The following graph shows the supply and demand curves of gloves for Portugal. Germany and France ...

The following graph shows the supply and demand curves of gloves for Portugal. Germany and France supply gloves to Portugal at a price of \( \$ 2 \) and \( \$ 3 \), respectively. The green line indicates a \( 100 \% \) nondiscriminatory tariff on Portugal's glove imports. Suppose Portugal forms a customs union with France. The customs union results in the trade creation effect of and the trade diversion effect of . The overall welfare of Portugal If, instead, Portugal forms a customs union with Germany, the result will be a customs union. The welfare of Portugal will by an amount equal to a effect of