Figure 9-7. The figure applies to the nation of Wales and the good is cheese.
-Refer to Figure 9-7. Which of the following is a valid equation for the gains from trade?

Question

Figure 9-7. The figure applies to the nation of Wales and the good is cheese. 
-Refer to Figure 9-7. Which of the following is a valid equation for the gains from trade?

Quizplus · Accepted Answer

The gains from trade are typically represented as the area of a triangle on a supply and demand graph, calculated as (1/2)(base)(height). In this context, (P1 - P0) represents the price difference (height), and (Q2 - Q1) represents the quantity difference (base).