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Transportation costs on trade

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What are the effects of transportation costs on trade? What would happen if transportation costs were absent?

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Transportation cost adds to the overall cost of the product when it reaches in the hands of the end customer. For example, if I want to import a $20 bottle of wine from France and its transportation cost (shipping) is $8. The overall cost to me for the bottle ...

Solution Summary

Explains the how transportation cost will have an impact on international trade of a product.