Use the following to answer questions:
Figure: Gains from Trade
-(Figure: Gains from Trade) Refer to the figure. What are the unexploited gains from trade at the free market equilibrium?
A) $1,000
B) $500
C) $0
D) $1,500

Question

Use the following to answer questions:
Figure: Gains from Trade 
-(Figure: Gains from Trade) Refer to the figure. What are the unexploited gains from trade at the free market equilibrium?
A) $1,000 
B) $500 
C) $0 
D) $1,500

Quizplus · Accepted Answer

At the free market equilibrium, there is no unexploited gains from trade. The quantity exchanged is maximized and the total surplus is maximized as well. Therefore, there is no room for further gains from trade.

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