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A Free Trade Area Is Like a Customs Union Except

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A free trade area is like a customs union except it members adopt a common external tariff structure.


Definitions:

Price-Discriminating

A pricing strategy where a seller charges different prices for the same product or service to different customers, based on factors like buyer's age, location, or purchase history.

Elastic Demand

A situation in which the demand for a product is highly responsive to changes in its price.

Arbitrage

The practice of profiting from a price difference between two or more markets, transferring a commodity or financial instrument from a lower-priced market to a higher-priced one.

Inelastic Demand

A situation in economics where the change in the price of a good or service has little to no effect on the quantity demanded by consumers.

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