A country will gain from international trade whenever the world relative price differs from the autarkic relative price.

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This statement is a basic principle of international trade theory, known as the Principle of Comparative Advantage. The autarkic relative price refers to the price level that would prevail in the absence of trade. The world relative price refers to the price level that results from international trade, which takes into account the advantages and disadvantages of different countries in producing different goods. When the world relative price is different from the autarkic relative price, it means that a country can specialize in producing the goods for which it has a comparative advantage and trade with other countries, allowing it to consume more goods overall than it could in isolation. This leads to gains from trade for each participating country.

A Country Will Gain from International Trade Whenever the World