The trade-creation effect refers to:

a. the outcome of a preferential trade agreement that reduces economic efficiency by shifting production to a higher-cost producer.
b. the effect of an increase in the quantity of imports relative to the effect of a tariff applicable to all imports.
c. the outcome of a preferential trade agreement that allows a country to obtain goods at a lower cost than is available at home.
d. the effect of a diversion of production to a country that has comparative advantage due to a free trade agreement.
e. the effect of a decrease in the quantity of exports relative to the effect of a subsidy applicable to all exports.

c