Gains from voluntary trade arise because
A)it reallocates goods between individuals.
B)it occurs in a household.
C)it reallocates goods between individuals in a way they both prefer.
D)it occurs in a market.
E)of the power involved.

Question

Quizplus · Accepted Answer

Gains from voluntary trade arise because it reallocates goods between individuals in a way they both prefer. Both parties engage in the trade because they believe that they will be better off after the trade than they were before it. This results in both parties benefiting, which leads to mutual gains from the trade.

Gains from Voluntary Trade Arise Because