why-is-setting-a-trade-price-crucial-in-determining-the-terms-of-trade

Question

Why is setting a trade price crucial in determining the terms of trade?

Accepted Answer

It ensures that both parties benefit from the trade.

Answer

It allows for the production of goods that were previously impossible.

Answer

It prevents any changes in the opportunity costs.

Answer

It guarantees that one party will always have a surplus.