Gains from trade are measured by:
A)consumer surplus.
B)producer surplus.
C)the sum of consumer and producer surplus.
D)producer surplus minus consumer surplus.

Question

Gains from trade are measured by:​
A)​consumer surplus.
B)​producer surplus.
C)​the sum of consumer and producer surplus.
D)​producer surplus minus consumer surplus.

Quizplus · Accepted Answer

Gains from trade are measured by the sum of consumer and producer surplus, as both parties benefit from trade. Consumer surplus represents the difference between the maximum amount a consumer is willing to pay for a good and the actual price paid. Producer surplus represents the difference between the actual price a producer receives and the minimum amount they are willing to accept. The total gains from trade are the combined benefits to both producers and consumers, which is measured by the sum of consumer and producer surplus.

Gains from Trade Are Measured By:​

Gains from Trade Are Measured By: