Net gain from trade for country in opening up to free trade

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Suppose in the market for oranges in a small country closed to international trade, the domestic price is $3 per lb. at which 10,000 lbs. are bought and sold in the country, while the world price is $4 per lb. If the country opens up to free trade with the world, the domestic quantity demanded at the world price will be 8,000 lbs. and the domestic quantity supplied at the world price will be 12,000 lbs. Answer questions 9, 10, 11, 12, 13 using this information.

How much (in $) is the net gain from trade for this country in opening up to free trade?

Reference no: EM131091362

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