Which of the following is true with regard to the competitive theory of international trade?

Question

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The competitive theory of international trade states that gains from trade can be demonstrated when two countries determine the terms of their trade through bargaining or trade goods in a competitive market. This means that countries can trade based on their comparative advantage and both can benefit from the exchange. Trade deficits or surpluses do not play a role in this theory. The theory also assumes that in the absence of trade, the consumption possibilities of each country are far below its own production possibilities. Finally, gains from trade occur even if there are differences in the relative prices of untraded factor inputs such as labor.

Which of the Following Is True with Regard to the Competitive