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A group of countries forms a customs union. Is trade diversion more likely or less likely in the following cases? 1. The customs union's firms

A group of countries forms a customs union. Is trade diversion more likely or less likely in the following cases? 1. The customs union's firms gain monopoly power in world trade. 2. Recent technological developments in production and telecommunications reduce the differences in production costs associated with different locations. 3. The development of an internal market within the customs union results in significant economies of scale in many industries.

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