Gains from trade

Gains from trade

Gains from trade refer to the net benefits gained by economic agents for increasing voluntary trading with on one other. It is a simple concept where different parties trade to achieve a particular goal. It involves lowering the tariffs to increase consumer and producer surplus.

Answer to the question

International trade can help countries to produce additional products and gain consumption benefits. For these reasons, firms, business people and nations can come together to trade good and services. The act of exchanging their goods, the country enjoys a wide variety of products which can be obtained easily. Also, the International division of labour is another thing which can benefit trade between different countries. Trade raises the economy, and upon an increase in the total world, output increases the real living standards of a country. All these constitute all the gains from trade.