When trade is voluntary, neither the buyer nor the seller will:
A)gain from the trade.
B)generate surplus.
C)be worse off after the trade.
D)need to make any payments.

Question

Quizplus · Accepted Answer

When trade is voluntary, both parties engage in the trade because they believe they will benefit from it. Therefore, neither the buyer nor the seller will be worse off after the trade. If they were worse off, they wouldn't have engaged in the trade in the first place. While it is possible for one party to generate more surplus than the other, both parties will still benefit to some extent from the trade. Additionally, in some cases, one or both parties may need to make payments (such as in a cash transaction).

When Trade Is Voluntary, Neither the Buyer nor the Seller