If nations trade on the basis of comparative advantage

Question

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When nations trade on the basis of comparative advantage, all trading partners can gain from the trade, but how the gains are distributed can be determined by their negotiating ability. This means that some partners may gain more than others based on their negotiation skills and bargaining power. It is not necessary for a nation to have an absolute advantage to gain from trade based on comparative advantage.

If Nations Trade on the Basis of Comparative Advantage