In a free market, gains from trade are maximized when people act in their own self-interest.

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This is a fundamental principle of economics known as the "invisible hand" theory, which states that when individuals pursue their own self-interest in a free market, they inadvertently promote the public good by producing goods and services that satisfy the needs and wants of others. In other words, self-interested behavior leads to mutually beneficial exchanges and efficient allocation of resources, resulting in gains from trade for all parties involved.

In a Free Market, Gains from Trade Are Maximized When